Originally Posted by genejockey

I'd assume it's measuring power output and yes, using an algorithm that calculates what your speed on the road would be for that power output, given your mass, the virtual slope, and estimated wind and rolling resistance. In Erg mode your wheel speed is meaningless because you could theoretically be spinning 39x30 or 53x11 at the same cadence and putting out the same power, but on the actual road you might be going 9 mph with one and 34 in the other.