Warning! this transaction is a double spend. You should be extremely careful when trusting any transactions to/from this sender.
All valid transactions are relayed through the network. A client does not know which transactions will be a part of a block, so it stores and relays both double-spent transactions. If you regularly poll your bitcoind, you can see every transaction before it is put in a block. Then it is just a matter of checking txin data for duplicate inputs.
The bitcoin network does NOT relay unconfirmed transactions that double spend other unconfirmed transactions, so neither blockchain.info not anyone else sees most unconfirmed double-spends. Nodes do not store two conflicting spends - they store only the first one they see.
This is becoming a bigger challenge for merchants because they need to connect to thousands of nodes in the hope of spotting double-spends.
The Bitcoin XT patch set is an early release of functions that are proposed for Bitcoin Core. It does relay double spends, and notifies the wallet of double-spend attempts that affect it.