While I am not going to attempt to fully understand every aspect of the article, GamaSutra has an article up about the gravity system used in Super Mario Galaxy.  The more technically-minded folks out there might find it interesting -- as best as I can tell, the gravitational pull on Mario is generated based on the closest polygon on the planetoid and a single ray dropped down from Mario's center.

If this makes more sense to you than it does to me, you are either Megabyte or the sort of person interested in reading the article.  Go take a look, either way.

Source: GamaSutra