The Bacon Portal Gun is a portal gun with a piece of bacon stuck onto the end of it. It shoots its own set of linked portals with customizable colors, which are unconnected with the Default Portal Gun's blue and orange portals. In current version of the mod, (MC 1.2.5 v3) this portal gun has special properties in SMP; players may choose the colors of the portals their Bacon Portal Gun shoots, and so each player can have their own set of portals unconnected to every other pair. Other than the above differences, it exhibits the same behavior as the Default Portal Gun.
The colors of the two portals that the Bacon Portal Gun shoots can be customized in the global properties file, by setting baconGunColour1 and baconGunColour2 to the desired values. Also, customBaconGunColour must be set to 1 (default 0), otherwise the default Bacon Portal Gun colors will be used. However, regardless of what colors you specify there, the item seen in your hand and your inventory will always appear blue after shooting the primary portal, and orange after shooting the secondary portal.
If you have watched the other video on the forums and saw that when the portal was shot to the moon the blocks get sucked in and then they disappear. This is possible in-game too just shoot a portal to the moon and then anywhere you want. Enjoy :)
Relation to Portal 2
This portal gun is a reference to chapter 7, The Reunion, in Portal 2, in which POTaTOS (GLaDOS in a potato battery) is stuck onto the gun.