It works by connecting to the Local Area Wireless Broadcast.
Exactly like a Mobile Phone it contains a Small SIM card inside it.
All it needs is power. Once it is plugged in it recieves the Wireless Internet through the air then rebroadcasts it throughout your home. With a range of approx 50 meters. If you need more range then are boosters are also available.
You can connect devices using a hardline or wirelessly using the password on the Router itself.