Well, here's my take on that screenshot:
And, in order to this, numerour screenshots would have had to be cropped in order to get the correct resolution; or, perhaps, if this were done on a certain driver on a widescreeen monitor, you could use a rather unusual resolution, e.g 400x640, which would flip the image 90 degrees. This is what my laptop can do, with Intel's official drivers for it's integrated chipsets.
After that, all that would have to be done is the HUD and Sonic be pasted onto the image; a little editing is all it would take, especially in software and it's (rather lame looking, OGL FANBOY 4EVA) shading, and a completely transparent WAD with "invisible" sprites. I done this for Zeshiro once, the "cameraman.wad", which he used to "film" netgames (FRAPs), with a character that you were incapable of seeing. Also, in order to prevent cheating, edited the throwing so he could not throw rings. :P (throwobject or something?)
But, yeah. With right software (or hardware, possibly), and a little editing, it'd be possible to paste a hud onto a 90 degree flipped screenshot(s), as well as a Sonic sprite. Also brings me to say that it is probably why Sonic is shown jumping, to prevent any eagle-eye spotting any sort of error with him standing in the wrong place on the "floor".