Relative Vertex Keys, or RVKs for short store the difference between a reference mesh and the distortion. Not only you can then define how much of the distortion should be applied (and can go beyond 100% and even be negative), but also enables you to apply several deformations at once. That means you don’t need as many keys as you would need with absolute vertex keys.
Some facts about RVKs and the demo:
The deformations only apply on vertices that have actually been changed.
When creating new RVK, the currently selected RVK is taken as the reference key
You can have up to 63 RVKs per mesh now.
You can rename RVKs in the action editor (Shift+F12) by pressing n key while over the key name.
You need to take care about the vertical positions of your keys, since rearranging the RVKs vertically as shown in the demo can give you some rather nasty “oops I’m controlling the wrong one” issues.
Again, this is more of a tutorial for myself really to clear things up. One thing I’m not sure about is when I don’t add the first keyframe for a particular RVK in the IPO graph, but use the action editor instead. Then the keyframes don’t show up in the IPO graph at all, but the mesh is deformed as if they existed and are shown in the action editor. Is this a bug or am I missing something? Please drop me a line if you know.