Espresso brewing relies on heat, pressure, and a surrounding liquid to extract flavors and caffeine from coffee grounds. A typical espresso machine uses an "infusion" method, in which hot water is forced at high pressure downward through a pile of grounds, soaking up flavor as it goes.
A "moka" espresso pot supposedly works on an "extraction" principle, in which a mixture of hot water and steam is forced upward (by steam pressure) through a pile of grounds, acquiring flavor and caffeine. I don't really see how this is chemically any different from "infusion", but due to the action of the steam it indeed operates at higher temperature and pressure, resulting in a stronger coffee mixture.
The pot consists of three parts:
1) A small, sealable chamber to hold water; this is the top-right item in the image.
2) A coarse filter and panel to hold coffee grounds above (1); this is the bottom-center item in the image.
3) An empty vessel (with a second filter) to collect the output of (2); this is the top-left item in the image.
Stick that on a stove, and the water in part (1) will eventually boil and steam, creating a flow upward that carries flavor from the grounds (2) up into the collection chamber (3). After a couple of minutes, open up (3) and there's your espresso.
Note that due to the somewhat less controlled brewing process, and the (typically) coarser filter, this device results in a thin layer of sediment collecting at the bottom of the collection vessel. As with turkish coffee, you don't drink that part :)











