The black goo, called Cambridge sludge, works just like a normal battery. The goo is a liquid suspension that has charged particles and flows like quicksand. There is a positive suspension on one side and a negative suspension on the other. A current is generated when the charge moves from one goo to another through a thin membrane.
It's a unique technology that could be used in electric cars or other large batteries. Best of all, this MIT battery is cheaper than lithium-ion and can be recharged in a matter of minutes. All you have to do is pump out the depleted goo and replace it with some fresh goo. [MIT via Dvice]