In his trick with George Bush, Blaine does quite a few amazing things which completely confuse the former american president. First, he performs a clever card trick on him. He then tells him exactly the number Bush was thinking of. And as if this wouldn't be enough, Blaine says he has a present for him. As it turns out, the present is Bush's own watch!
You can see this fun trick here:
The card trick simply takes some misdirection. While Bush isn't paying attention, Blaine quicky changes the cards in his hands. You can catch him doing in in the video at about 0:13.
The mind reading part is probably the most impressive part of the trick. Blaine tells Bush to think of a number between 1 and 20. He then says 'seventeen', and Bush confirms this was the number he was thinking of. The trick here is that most people will choose 17 when asked to think of a number between 1 and 20. It's simply statistics. If Bush said something else, Blain would just pretend the whole 'think of a number' thing was just a distraction he used to steal his watch.
And the watch stealing part? This one is the most obvious and you can clearly see him doing it in the video. Observe how he holds Bush's left wrist and skillfully takes the watch off. Bush doesn't notice it because of all the misdirection. Blaine is moving his hands fast and also keeping him mentaly busy by asking him to think of a number. This takes the attention away from the wrist and enables Blaine to take steal the watch without anyone noticing it.