Both lanes at SYD (and MEL) use facial recognition. One extracts the photo on the epassport chip (AUS ppts only)and compares to you standing in front of the kiosk to decide if you are the passport holder. The other looks up a photo held in a database which 'enrolled' users (mainly QF crew and Platinum FF) had a photo taken for. Enrollment for this system finished years ago as epassports came about.
Both these (they were only ever intended as proof of concepts - political masters not withstanding))will be replaced with the permanent solution mid next year. This is already in use at BNE and very soon CNS.
To access data on the chip (photo/name/dob), the check digits from the machine readable zone on the passport need to be supplied to 'unlock' the chip. This is known as Basic Access Control (BAC). Theory being without the passport bio page details you can't read the chip. Hackers say this can be broken - but this is the current international (ICAO i think) standard. I believe there is a higher standard access control being mooted by some authorities.