Indeed they use polarized glasses. The idea is to hide one side of the image to one eye, and the same for the other. That way it gives the feeling of depth. The good thing about polarising is it doesn't loose colour, and have any "weird" side effects.
Polarized is indeed much better, also a little bit more expensive.
But the normal stereoscopic (red/cyaan, red/blue, red/green etc) is an easy way to experience some 3D like stuff, although the color is bad, since everything is filtered first