[JiveTurkey]

FYI - As for the "exactly how it works" part it reframes your ethernet frames(tunneling) into a routable packet that can then be sent across the internet and disassembled on another computer and sent to someone elses Box. It's pretty cool stuff since the computers and network do all of the behind the scenes stuff while the Xbox doesnt even know it's not on a LAN with another Xbox.
I've seen advertisements for Gamespy Tunnel which is a similar application but I haven't used it. From what I've seen it is also free so you might want to give it a try.