They are using a very similar solution to the bluetooth but with much lower latency. Bluetooth is too laggy and they prioritized low-latency (both ways) for the controller, so it wasn’t an option.
Official Steam Machines will have it built-in.
I hate to double post but:
https://www.pcgamesn.com/steam-controller-will-release-october-or-november-steam-machines-follow-year-s-end
Looking forward to it! Will especially need it if I end up getting an Oculus (which I probably will). Really wanting to hear some pricing info. Hoping it’s 50, but wouldn’t be surprised to see it at 60.
That means no new half life until 2015
I hope that tessellation will become an option for games that are running under the “SteamOS”, as, for example, the linux version of “Metro: Last Light” does not feature it. 
I suppose that the reason fot probable release date of the SteamMachine being moved all the way to the 2015 is that (EDIT: ) performance ( :EDIT)-wise, the PC hardware for the SteamMachine will be set farther apart from the PS4/XBox One, and that is what will introduce the huge sales.
I really doubt that’s their reasoning. The Steam Machines aren’t using the same single model single release date strategy of traditional consoles. Most Steamboxes will already have a massive graphical lead over the consoles because they’re generally going to be more expensive with more expensive hardware and the consoles are running relatively low end hardware. Not to mention, I think Valve has tried to make it pretty clear that they’re not really trying to go head to head with M$ and Playstation (really wish they would).
Valve probably delayed the Steam Machine and Controller for the same reason they always delay things: these things, they take time. They got a lot of feedback on the controller (a fair amount of it negative) and probably have to now do a lot more revision and polishing than they originally planned on which will take more time, and I don’t think they want to release the Steamboxes without the Steam Controller.
https://www.pcgamer.com/2014/07/23/new-steam-controller-image-suggests-valve-adding-an-analog-stick/
I think I would probably rather have a thumbstick in the position a camera control would usually be, that is, the right side, rather than on the movement side. Seems the trackpad could get more annoying to need a change when controlling the camera than for movement.