Just as an update to my 1st lesson in the workbook:
It explains a lot of what you are asking about. But in the end you just need to pick a book (if, like me, a 'live' teacher isn't available) and set your focus on that one thing. After investing time in it if you seek further knowledge, go to the next book. The thing I've learned so far is that you can not expect to achieve great insight immediately, and that you need to take your time. So it seems that beginners step 1 would be focus on just sitting and breathing. Then move on to the next step. It takes a very long time to reach different levels in your meditation, so be sure that you are accomplishing each step, no matter how small, in its entirety before moving on to something new. To quote the workbook I'm using, Insight Meditation Step-by-Step, "If you are new to practice it's important to realize that simply to sit on that cushion for fifteen minutes is a victory." -Charlotte Joko Beck.
Also, here is link that you can read--I just read it this morning and it was very good.
Good luck with your practice!
PS: In regards to how does it work, I don't think that is really important to know for the practice, and also, I think the "how" is going to probably vary from person to person b/c we all deal with different struggles within ourselves. So for one person it might have been achieved by realizing and being able to let go of anger towards something someone did, and for another it may be in realizing the universal love they have for animals....so I think the "how" is going to be a very personal and individual thing... Just my thoughts anyways!