The base is fixed to the boat, the payload sits on top, and the gadget sits in the middle, reading from the compass and driving a small motor to keep the payload facing in the same direction.
Here are some front, top and side photos:
The arduino board is mounted on top of the gadget, it's a standard type of arduino board, the entire thing is powered through a USB adapter.
Mounted under the arduino board is the fluxgate compass. I guess you could feed in NMEA data from an existing on board fluxgate but the one mounted here is so tiny it forms part of the unit.
Here's a video of the thing in operation: