i think i just lost a long post to this thread explaining how these work. it probably wasn't very clear anyway, and the best way to figure it out is just to do it for yourself and you'll see how very simple it is, but...

in short, the cable is fixed to the inside of the lever, and to the brake. unlike regular levers, it never moves on the lever end.

when you pull the lever, you push the housing away from the lever body, effectively lengthening the area the housing occupies. since the cable isn't moving on the lever end, this has the effect of pulling the cable up where it can move - in the spring loaded caliper of the brake.