The system is stated to be released before the end of next March in Japan, hopefully with a North American release to come shortly after. The system should make an appearance in this year's E3 coverage, but it's very likely that we'll hear more news of it before then. As of yet, Nintendo has not released any images of the system, how the games will look, or even played. But yes, the name does imply that the system will be in 3D.
As to how it will be displayed, it might follow a similar concept of head tracking to estimate the projected image that you would see if it were in 3D (embedded video below). By using the tracking system in relation to your eyes, it gives a 3rd dimension feel by allowing you to control the angle of viewing to change the image on the screen.
As with the Wii, a lot of Nintendo's successful product launches, due to their very much innovative natures, may seem silly or unnecessary at first. Give them a chance though, and it may be you standing in line outside a Best Buy waiting for your next console.