In simple terms, the panelling makes the hips/bottom look narrower than they are - which is great, particularly if you spend a lot of time walking into rooms backwards. As to the magical bottom shrinking capabilities of these trousers, the reason for it (I did have a photograph taken of myself in the trousers to demonstrate the point but it was so horrific that I quickly removed myself from the photograph) is that there are fairly wide, but subtle, panels up the sides of the trousers. These go around to the back of the trouser so that, as shown in the picture below, the distance (in width) from the back mid-line of the trouser, to the outside seam, is much less than usual (probably by a couple of inches on each side) making the hips look narrower. It's a bit hard to explain but hopefully you'll get the idea.
If like me you like a half way trouser - not too smart but smarter than jeans - these are definitely worth taking a look at. As to the photos - personally I like the blurred look, it's so much softer than HD - but it wasn't intentional - just a five year old with a wobbly hand! I'm also wearing my current favourite Topshop pale blue jumper, a French Connection printed scarf and Zara boots.