Here's how MIT describes the system:
[They had] several designs ideas in mind such as using hydraulic actuation to move rare-earth magnetic materials through inductive wire coils, employing ferrofluids to act as the damping medium of the shock absorber, and using turbines and generators in various conformations to convert the energy of pumped car suspension fluid. The ability to regenerate electricity from the vertical motion of a car would best serve gas-electric hybrid and full electric automobiles. Hybrid cars would be able to rely more on their electric engines for power and improve their fuel efficiency, and electric cars would be able to travel further on a single charge because of their ability to regenerate part of the energy that they lose while driving.
First and second place in the contest went to a device that generated electricity from biomass and a biogas digester. Finalists included a wind turbine with no moving parts and a refrigerator that requires no electricity. The contest challenged students to "design and build a prototype device that harvests, stores, or exploits alternative energy sources through principles of materials science and engineering." First price was $5,000 second $3,000 and third $2,000.
[Source: MIT News Office]