From the ebay description:
When the key is wound, and the knob pulled, the motion is activated. The left foot taps, the body moves forward and back at the waist, the right hand strums the guitar, the left hand slides up and down the guitar neck, the head rolls left to right, while nodding up and down. There is also slight tongue action, as the clown sticks the tongue out. The music is a typical slow waltz.
Here is where you can see more images and read more about this antique clown automaton by Lambert.