Help me win the BET! How does Google Earth get their "Streetview" perspective?

My friend and I have a disagreement about how they get those street views...you know the feature where you can zoom down, turn back and forth and it looks like you're standing right in front of your house (or whatever place you choose to fly to)?

My friend foolishly thinks that Google actually had people go around every location in the world with a 360 degree camera and take videos. I maintain that that is impossible or, if remotely possible would take YEARS to complete and that it is all done by satellite. Please settle our dispute as a lobster and prime rib dinner is riding on this!