Each ball is usually bounced separately first and the height of the bounce measured. Because energy is lost through sound, heat etc as a ball hits the floor it will never bounce to, or higher than, the height it is dropped from. That is what makes this demonstration interesting as the tennis ball will travel higher than from where it was dropped from when combined with the bounce of the basketball.
Equipment required (per demonstration):
GPE = mgh
Where m=mass, g=acceleration due to gravity and h=height.
The conservation of momentum law can be stated as:
For a collision occurring between object 'A' and object 'B', the total momentum of the two objects before the collision is equal to the total momentum of the two objects after the collision. The momentum lost by object A is equal to the momentum gained by object B.
Applying this to the demonstration, When the two collide, their momentums are the same but because the larger ball has a greater mass, to balance the equation the smaller ball must achieve a greater velocity. The result of this is that the tennis ball bounces very high.
Typical technician preparation time for this demonstration: 5 minutes.