You slide the mini through the rear wheel between the chain and seat stays (rear triangle). As long as the lock goes between the stays and around the rim and tire and then to your anchor, your frame cannot be stolen. The rear wheel cannot fit through the rear triangle. Attempts at cutting through the rim and tire will be severly hampered by spoke tension pulling the rim together. Also the tire beads are a hassle to cut through.
See Sheldon Brown's website for a more thorough description.
(Although I take issue with him saying removing the front wheel is a waste of time. A long mini lock through both wheels and frame provides excellent theft protection. And a New York chain or lock even more. I have nice enough front wheels that make it worth the effort to cut a cable to steal just a wheel.)