It's the bitwise 'not' operator.

Similar to the 'and' and 'or' operators, it compares the bits in the two numbers, and only yield ones when they are different.

int a = 205;   // In binary: 11001101
int b = 45;    // In binary: 00101101
int c = a ^ b; // In binary: 11100000

I read somewhere Java 7 will have a binary prefix. That will make it so much easier to use this (of course, it will take a while for Processing to adopt that version of Java, but that's another issue).

Thanks!