It uses one of three methods to do so - those used by the US Navy, the US Army and the YMCA.
I've released this application as freeware. I'm considering enhancing it with the ability to store your figures each time you measure yourself and draw pretty graphs telling you the changes in your measurements and fat percentage over time. If I do that, I'll probably charge a small amount for the application. Let me know if you'd like this feature - and you'd pay more...
RequirementsMac OS X 10.4 or later
*Previously available here