The Sustainiac is really cool. They have two different models that work on a similar principle.
The original model (from the early 90's) has a floor box that looks like a footpedal and is actually a small power amp. You feed it the signal from your guitar, but instead of the output going to a speaker, it goes to a vibrating transducer that you attach to the headstock of your guitar. When you play the guitar is literally vibrates the guitar (hard!) giving you physical feedback. You get the same sort of sound as if you were playing super-loud or if you touch your headstock to your amp - infinite sustain or feedback. You can control the amount and harmonics to the transducer from the floor box. It can come in gently or leap into octave sustain instantly. It's really cool.
The design of the original Sustainiac doesn't lend itself well to playing live since you have to have a wire running to the headstock of your guitar. So, they created a newer model which replaces your neck pickup with a string drive coil. There's an amp onboard your guitar which outputs it's signal into the drive coil, which vibrates the string. Again, you can get different levels of sustain effect, and you can do it while running around on stage. This model only vibrates the string, so it's not quite like the original model where the entire guitar starts vibrating in your hands.
The Sustainiac really does it's thing well. Since it's using your guitar sound to drive the strings, it will play the notes you play, but doesn't try to drive anything else. It's much more natural sounding and finely controllable than a regular effects box.
There are a couple of interesting related devices. If you've ever seen an eBow, this is doing a similar function. The eBow has a vibrating magnetic field that causes the string to vibrate without you picking it. The eBow has a different kind of sound since it doesn't know what you're playing - the vibrating magnetic field is fixed in frequency, but it will cause the note you finger to play in any case.
Recently, Moog (the synth people) starting selling a very unusual guitar that does something similar to the Sustainiac. That guitar also has a magnetic drive coil that can vibrate the string, using the guitar output as it's input, so it works like the newer Sustainiac. But they added a full range of tone and envelope processing to the string driver. So it can do some really crazy things like drive the string in opposite polarity to what you play - this has the effect of magnetically muting the string, so you can get picked sounds like a harpsichord or a thumpy bass. You can control how quickly the effect comes in to create a lot of very unusual tones that would be very hard to create on a regular instrument.
David Fung