My brother put this on his blog. He made a secret compartment book using the video and info at MAKE: Blog's weekend projects podcast. A commenter there mentioned using a scroll saw to cut out the pages quickly.
Sam at asylums left a comment on that site with a link to his own project. He added magnets to hold the book shut--cool idea.
He says he got his ideas from How To Do Stuff: How To Make a Secret Hollow Book. That site has great step-by-step instructions and photos. Someone anonymous commented on that site with more on using magnets:
expanding on the idea of the magnets as i have done this with my book. the best kind i have found are in a magnetix play set from walmart. there small round rare earth magnets, you heat up the stupid plastic around them and they pop right out, need 4 of them. instead of saving one page save about 200. make it as normal then drill 2 holes on the bottom portion. drop in the magnets and seal about 10 or so pages over them and cut them out, then do the top section saving about 10 pages as well out of the 200, do the glue , exacto knife and everything as normal except for 180 pages. then dril 2 more holes, make sure that N goes to S otherwise the cover will repel. glue the 10 pages on top and you got concealed magnets to keep it closed.
Wow! People are really into this stuff! That guy also has How To Make a Secret Hollow Soda Can.
Then there's a site where you can just buy the books already finished, freehollowbooks.
Cool projects. My kids might get into this!