Based on information from their site it appears that they are using 1st method. Especially after reading the following
Justin W2 weeks ago
Gmail recently made a change that causes image requests to
lose all their identifying information. What this means is
that email opens from a Gmail account will show up as anonymous.
Found at http://blog.streak.com/2013/11/unlimited-email-tracking-for-gmail-with.html
This means that whoever opens your email has download images disabled that will mean that tracking fails. In case of another Gmail subscriber reading the message Google will automatically protect their information.
So to prevent people from tracking you make sure to disable automatic picture download.
Than I would take advice from Google when you go Incognito mode, this relates to websites, ads and etc tracking you not other people using streak.
Going incognito doesn't affect the behavior of other people, servers, or software. Be wary of:
- Websites that collect or share information about you
- Internet service providers or employers that track the pages you visit
- Malicious software that tracks your keystrokes in exchange for free smileys
- Surveillance by secret agents
- People standing behind you