The calculator uses your basal metabolic rate (calculated on the Mifflin-St Jeor formula) and the MET value (see below) for an activity to calculate calories burned. It does not take into account environmental factors, such as running into the wind or up hills, or a person's body composition, i.e. the amount of muscle versus fat (muscle burns more calories than fat).
The intensity at which you perform the activity will also affect how many calories you burn, however, this is factored in only for activities such as cycling or running where the pace can be easily measured.
A MET is a concept used to compare the energy cost of different physical activities. One MET is equivalent to a metabolic rate consuming 1 kilocalorie per kg of bodyweight per hour, and is equivalent to your resting metabolic rate - that is the energy your body uses to stay functioning at rest. An activity of 8 METs, such as singles tennis, would use 8 times as much energy as you do at rest.
Reference: MET data obtained from: Ainsworth BE, Haskell WL, Whitt MC et al. Compendium of physical activities: an update of activity codes and MET intensities. Med Sci Sports Exerc 2000; 32(9): S498-S516 (suppl)