quite simple really, its person to person selling, the site is set up in multiple catagories, sub catagories and sub sub catagories

sellers post their items for sale, with a starting price and/or a buy it now feature (most dont have buy it now only) you look about the various catagories for things that interest you or you can search for specific things. once you see an item you want you place a bid (providing you have an account) and if the auction ends (most run for about 10 days, ive never sold anything so i dont know if there is a way of deciding how long your auction goes for)
damn it, infernal monkey pasted a link and made me lose me train of thought :\
but ehm... oh yeah, obviously if your the highest bidder at the end of the auction A WINNER IS YOU! and then you get the details of payment from the seller, give them a posting address, and baring no major wang ups you get your item!