Well when a man and woman get together...er wrong discussion. Growl. Right.
When an application (or script) wants to display a notification to the user (that's you), it sends the information to a background application running on your Mac called GrowlHelperApp. GrowlHelperApp will then, depending on your preferences, show the notification using one of the display plug-ins.
Off course, the applications must support Growl. You can find a list of applications that work with Growl.
The GrowlHelperApp will be launched everytime Growl starts.

The actual display of the notifications is handled by GrowlHelperApp. But the preferences for the display types are in the preference pane.
Now, onto installation!