Taken from Ducatis web site.
"Upon activation, front and rear wheel sensors compare speed differential to sense when rear traction is being broken (wheel-spin). Using exactly the same software logic developed and used by Ducati Corse, instant electronic adjustment to the ignition advance or a pattern of 'spark cuts' initiates immediate control over power output so as to restore traction at the rear wheel before re-establishing normal power delivery".
The 1098r traction control is only active if the full race exhaust and ecu are installed.
The 1198s traction control is the same except it cuts fuel instead of spark, so that it can be used with the catalized street legal exhaust.