I listened to the Toronto Presentation clips again and found what may have been the reference to optical processing that I remembered.

Here's Part 2 of the clips: http://www.youtube.com/watch?v=NH9yj3u5Nig

The whole presentation is pretty good but listen specifically from about 5:40 on to hear Lee Shepherd talk about optical and electrical integration in POET. He then mentions that "beyond the electo-optical integration and the very high performance of the electrical, or electronic processing that can be done, there is also a very significant capability to do optical processing, which means actually processing data in optical form..."

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