In the Macworld review, it states "MarcoPolo constantly examines various sources of data about your computer; you set rules based on these sources, assigning a degree of confidence to each rule."
Evidence Sources include:
*WiFi network (not working in v2.5- find v2.5.1 or wait for v3.0 rewrite)
*Light meter reading
*Power source- battery or AC
*Currently running application
*Running an AppleScript
*Setting Network Location
*Launching or quitting an Application
*Changing the desktop background
*Activating or deactivating a network port
MarcoPolos concept of contexts is a generalisation of a location, and encompasses more than just where the computer is located. A context might represent what you are doing, or what else is going on around you.