Neither, they grew the ear on the mouse by using a biodegradable ear structure and bovine cartilage.
ok, i see what they did... but to do that what they are doing is inducing the native mouse "growth genes" ( really what they are are homeotic transcription factors which are genes responsible for setting up our segmental body parts and helping them to grow in specfic places [which you can mutate and express ectopically, say on backs]) to take some basic building blacks and complete the process.... this is only possible due to gene conservation between the species.
so they took human ear gene... linked it up with the mouse transcriptionfactor for ear growth... and ectopically expressed (mutated) where the mouse gene was telling "grow ear here".... so in effect... the mouse's normal biological process grew the ear (with a lil basic biodegradable help) using the mouse's biological processes.
they started doing all this stuff in flies... check out antennapedia.... where they made feet (pedia) frow on the head where antennas should be
same kind of homeotic transcription factors involved