[I'm actually using a qwerty keyboard now, so I'll be a bit more in-depth]
The set up running was of one Move controller, and all gameplay controls were gesture based (I'll get into that a bit later).
I have never played GST so I can't tell you on how they compare, and I should clarify how the on rails works. It's very much like the light gun shooters (such as The Shoot, or Time Crisis, both of which I played, although TC seemed to be the demo everyone has) in that it's a first person on rails game with your arm and racket being what appears on screen (depending on position of the controller, they do disappear). In terms of overall control of the racket, you can easily pick which corner you'd like to hit the ball into, and determine the way it travels, etc. The only time the game breaks from this first person perspective is durring the player's serves, which go third person. A simple tap or two to bounce the balls (rather than pressing a button), before a swing will launch the tennis ball flying the opposite direction. It may have just been me, but there appeared to be an intentional delay between the input of the swing (tracking had been more or less perfect prior, so I assume it's intentional), and when the game displayed it. Oddly, it was noticable when I played the game, but when watching others it felt completely nature and as if it was all in one action, so it may have just been me.
The SEGA rep there wasn't allowed to talk about any multiplayer details (local or online), saying that they'll announce these things in the future. It did go over my head to ask about Nav Controller support for any free roam modes (although in 3D I'd imagine that would be insane) or if there is a separate mode in the game for people who want a more traditional style VT.
Edit- I'm not a tennis pro, but I've played the sport before, and swinging the Move felt like swinging the real deal. The rumble, and shape of the controller aids in that.
Should also mention that the game looks pretty nice. The models do look a bit off in screen shots, but in motion, at least in 3D, they look good. I was Federer, and the CP was Roddick I believe.