It's a 320x400 screen-mode showing three static plasma-clouds (a red, a green and a blue one) drawn in alternating scanlines (and alternating row-order for each pixel), each using a part of the 256-colour palette.
The motion is produced by color-cycling the palette-part of each sub-image.
They're also toggling between two different row-alternations each frame (two 320x400 images fit the 256kb of standard-vga-ram).
Just zoom into the image to get the idea:
Hi, I was Googling around for some information about the Future Crew demos and bumped into this post. I haven't found much information as detailed as this about their effects so it was really cool to read this, and zoom into the image myself to see what you meant

I was just wondering, do you know how they made the plasma effect in Second Reality? As it seems a lot more dynamic than the one in Unreal (which as you say seems to be made out of static plasma clouds).