Here is more information about the tradition of exploding hammers:http://www.geeked.info/celebration-and-explosive-sledgehammers/
Thanks to someone reading the comments, I have located the person responsible for shooting the video. They have been sent a link in case they are not happy with this use.
The Ideal Gas law (pV=nRT) was first stated by Benot Clapeyron in 1834. Basically, from it we can deduct that if you compress a material quickly, it generates heat because of friction between the gas molecules.
In fact, this principal is what powers diesel engines. Of course, there are no gasses involved in the base explosives, the Ideal Gas law is cited here because it demonstrates the relationship between friction and heat. What triggers the detonation is a combination of shockwave and internal friction - that's why you have to use fireworks with chlorates or perchlorates in them (thanks kiteman).
Instead of a spark plug to ignite the fuel, diesel engines have a glow plug to heat the fuel to a critical temperature. It is the compression from the stroke of the piston itself that causes the final ignition!
In this instructable we will show you how to illustrate this principal while building an exploding sledgehammer. Be careful as this may be illegal and/or very dangerous.