The system was clever, involving two independent freewheels (large and small), and a single chain going from the top of the chainring to the top of the small cog, around the small cog, around an idler installed under the chainstay, back to the bottom of the large cog, around the large cog, and back to the bottom of the chainring.
When the rider pedalled forward, the chainring would pull on the small cog and engage its freewheel, while the large cog would freewheel in reverse. Conversely when the rider pedalled backward, the chainring would drive the large cog forward and let the small cog freewheel.
An excellent and detailled presentation of this system can be found at this page: http://www.m-gineering.nl/retrog.htm
But mostly, a Retro-direct bike is different: it makes you pedal backward to go forward, it has a strange look with its unusual chain routing, and it's just a great conversation starter. If you're into serious cycling, I suspect it's probably quite good at training odd leg muscles too, as the burning at the back of my thighs when I started commuting with mine would indicate.
Another drawback is that it forces you to learn how to pedal backward (duh...). Actually, I don't count this as a drawback myself, as I found this new skill amusing to learn. It's not very hard, but it's extremely counter-intuitive. Most people never pedalled backward under load, and at first, there's a great urge to stop pedalling and go forward. It also takes some time to learn how to honk on the pedals backward smoothly and efficiently, without "falling" into the deadspots at each turn of the crank.
Also, it's not possible to position the pedals without lifting the rear wheel. That's because both pedalling directions are used of course. This means it's important to stop at the red light with the pedals positioned correctly, and fixie riders will be right at home there. But it's also important to know whether you'll be restarting pedalling forward or backward when the light turns green, as the ideal crank position is different in each case. The bike does freewheel when it rolls though, so it's not as tough to stop right as it is with a fixie.
The bike will also refuse to be rolled backward. That's because both freewheels will engage and fight each other through the chain and the chainring. Therefore, to move the bike out of the garage tail first, you'll have to lift the rear wheel. However, the flip-side is that you'll have a great parking brake when parking your bike in a hilly street: simply point the bike's tail downhill, prop your bike against something, and it'll stay there.
Finally, in case you're a bit shy, forget the Retro-direct conversion: you'll be at the receiving end of strange stares and laughs when you go uphill pedalling backward. It's just weird and slightly clownesque. Of course, it's easily cured by pedalling back in the traditional direction.
I'm sure there are other Retro-direct riders out there though, only they didn't make themselves known on the internet. If you're one of them, please drop me an email (see at the bottom of this page).
Other than that, the work involves ripping off the original derailleurs, cables and shifters.
My big concern was having to modify the frame. I found another solution on my bike that doesn't involve re-welding the chainstay, but requires two chains, two chainwheels and two idlers.
Screwing two freewheels onto one hub isn't very hard: as it happens, freewheels and bottom brackets share the same thread size (1.370" x 24 tpi with 60-degree threads. It's an ISO thread, go figure...). Ross Harrop simply screwed the large freewheel onto the hub, a BB cup onto the leftover threads of the large freewheel, and the small freewheel onto the BB cup. Personally, I didn't feel confident that a BB cup would be enough to resist the torque freewheels have to withstand, so I turned a special adapter on the lathe with a BB thread at the workshop, but made of steel and a lot thicker than a BB cup. But essentially it's the same idea. If you're lighter than I am, the BB cup solution will probably work fine.
Finally, installing an idler (or two idlers, if you choose my Retro-direct variant) is left to your imagination. If you can weld, it'll be easy to do. If you can't, creative reusing of collars, metals rods and bike parts will probably lead to a solution. I did the latter on a Sunday in my garage, away from the workshop, without even a vise, with only things from the local home improvement store, a hacksaw, a drill and other basic tools, so it's definitely possible.
I started out with an old cheap mountain bike that happens to be my commuter bike. The neat thing with mountain bikes is the wide stays to accomodate fat tires, and more importantly, the fact that the stays "flare out" almost right behind the chainwheels, instead of leisurely opening up to accomodate the width of the hub like on a road bike.
With my mountain bike, when I tried running a chain from the bottom of the granny chainwheel to the top of the large freewheel, the chain crossed behind the chainstay without any interference. Here's what it looked like:
As it turned out, I wanted a very low granny gear and a fast gear, and I could get that easily with two different chainwheels, so that's when I decided to go with two chains, one forward and one reverse, instead of a single chain, an idler and a single freewheel.
Once I knew the reverse chain would run okay, I decided to take care of the forward ("normal") chain. Since my bike has vertical dropouts, I knew I could run into trouble for what amounted to a singlespeed conversion, since I had no way of adjusting the chain's tension. Luckily, I was able to run the forward chain without too much slack, at least for the time being:
I then proceeded to install the two idlers that would allow the reverse chain to come back to the granny chainwheel: the reverse chain's route is from the bottom of the chainwheel, to the top of the cog, around the cog, and back to the top of the chainwheel. Of course, for the last run, it's not really possible to cross the chain without major friction somewhere, so I decided to route the return run from the bottom of the cog back to the top of the chainwheel going around the bottom of the chainwheel, riding on idlers.
One idler could be installed directly on the seat tube, above the chainwheel, using an old seat clamp with the lip filed off, a 6mm screw and a bunch of nuts as spacers. The other idler got attached to a 40mmx40mm square section of steel tubing with another 6mm screw. I bolted the square section to the bottom of the bike in lieu of the kickstand (no welding required). I used a large square section so I could position the idler exactly where I wanted it to be, as an afterthought. Here's the result, not really beautiful, but functional:
Note that I finally ended up having to reuse the old rear derailleur as a chain tensioner, because there was just too much slack in the forward chain, and the chain was skipping off the large chainwheel all the time. Not too elegant, but at least I got to have fun hacksawing the cage :-)
Here is what the chains look like from behind:
If the above isn't clear, here are some videos to demonstrate how the drivetrain works. In all the videos, I turn the cranks backward, then forward:
Therefore, it is very important to drop a little loctite in the threads before screwing the pedals in the crank (no grease!), to screw the pedals in tight, and to check the pedals regularly. You could really get hurt, or at the very least strip the threads in the cranks if you let the pedals work themselves loose. It's better to seize the pedals in the cranks, even if you might have to change the cranks if you change the pedals in the future, than to risk getting hurt.
This is what happens if you don't use threadlock :
Regarding crankarm length: legs don't just pedal backward by mirroring forward pedalling movements, it is actually a totally different dynamic. Cranks that are right for you to pedal forward may not be right to pedal backward. In my case, I'm usually fond of 170mm cranks for normal upright bikes, but that crank size was killing my knees when pedalling backward on the Retro-Direct. My knees stopped hurting right after I installed 150mm cranks instead, and I noticed immediate improvements in smoothness and power when honking backward. So I suggest you take the time to experiment and find out the cranks that are right for you when you pedal backward, and get used to them pedalling forward. No sense in busting your knees for the sake of novelty.