It appears to be blown sugar... as it's quite similar to blown glass. This page gives a very brief overview of the process in creating blown sugar sculpture pieces: http://www.wisegeek.com/what-is-blown-sugar.htm
A bit more information on blowing and sculpting sugar can be found here:
I've always been intrigued by lampwork and blown glass sculptures and have studied it a bit, while doing other types of sculpture and carving work. It certainly appears that very similar effects can be achieved through pulled and blown sugar techniques if you develop the necessary skill.
http://www.pastryprofiles.com/The_making_of_a_sugar_showpiece_new/index.html (--- very cool slideshow on the making of a sugar showpiece. This one made my jaw drop! I would imagine it would take many years of practice, dedication and hard work to accomplish work of this caliber, although the results would be so worth it.
If I ran across a workshop on sugar sculpture, including blown sugar techniques, it's something I'd really consider attending. I'd love to see how this more elaborate sugar work is done first hand. =)