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What is this kind of card shuffling called?
Its a grid of cards where you take 1 card at a time to create a grid of say 2 wide and 2 tall, (although it could be any number wide/tall)
ASCII Drawing;
[[Deck]] -> Add one card to create 4 stacks and repeat the process over & over.
[Card] [Card]
[Card] [Card]
As you take cards you add it to a random stack thus creating (in the above example) 4 stacks (or decks) of cards
What is this shuffle called?
This is called random pile shuffling. Wikipedia defines pile shuffling as:
Cards are simply dealt out into a number of piles, then the piles are stacked on top of each other.
Here is a YouTube video demonstrating pile shuffling.
Trivia
At a Magic: the Gathering tournament, pile shuffling by itself is not a sufficient means of randomization.
Two others popular types of shuffling are (warning, these are video links) mash shuffling and riffle shuffling.
