The technique described here uses Photoshop's Lense Distortion Filter (available in PS CS3 and up). However, the basics can be done in older Photoshop versions, too, the tools are scattered all over the place though and thus may be hard to find. Therefore I have written a blog entry outlining those basic tools here: Digital Darkroom: Correcting Lense Distortions
that will explain where to find them and how to use them.
I suggest you still watch this video though, it will help make things clearer I haven't done a video tut in a long time (old pc wouldn't let me), so excuse any stuttering or incoreheren babbling... I'll get back into it soon, I hope. I just had to try the film feature now.