Its basicly a powerhead(s) without the powerhead. Essentially its an intake (your center hole) with an external pump that circulates your water, generally via drilled holes in your tank, but I guess you could go up and over the top. So the water never really leaves your tank. Adding circulation without hitting your sump (which would be an open loop) have a look at Snappys tank, his intake is in his overflow box and the holes drilled in the back are the returns. Page's 8-13 will show you this. Kinda hard to explain with out looking at it.
http://reefcentral.com/forums/showth...459184&page=12