What is wrong with this photograph? It seems like a toy /unreal something/? (wired.com)

Tilt shift photography.

It's probably been shot with a tilt-shift lens:

http://en.wikipedia.org/wiki/Tilt–shift_photography

You can make a tilt-shift lens pretty easily with very cheap components:

http://cow.mooh.org/projects/tiltshift/diyexamples.html