I've previously done a fair bit of reading on traffic filtering and management, and from my understanding, traffic filtering is done by reading the packet headers, then setting those as low priority. Bittorrent packets, for example, have a nice little string at the front of them that identifies it as such. Torrent 'encryption' removes these headers and makes it much harder for the ISP to tell what kind of packet it is, but I understand that there are methods for throttling these as well.

As for the resources problem, in the case of Virgin Media they outsource the throttling methods to Cisco, and I assume the saving on bandwidth is enough to cover Cisco's costs.