It's a simple tremolo technique. As Phil mentions, Li'l Rev teaches it in his "right hand workshop" but it's really a very common technique used by many for years on a lot of stringed instruments...especially short scale ones that don't have great sustain. Basically, it's a way of "holding out a long note" (or chord) on an instrument that isn't very good at holding out long notes; ukuleles and mandolins, for example.
Edit: Oh...and don't confuse tremolo with "tremelo" - the latter being a non-word for the vibrato bar that Leo didn't know the proper name for when he first put them on his electric guitars!
John