Systems such as Connexion (there is also a similar product from ARINC) have two elements. On the aircraft itself there is a series of wireless LAN antennas, similar to what you would have in your home or in an Internet cafe. This provides the ability to connect locally on the aircraft to the wireless signal. This element uses standard 802.11b/g technology, exactly the same as what's supported in most laptops today.
The second element is the connectivity to the Internet itself. There is a satellite connection to a ground station owned by the provider, with the antenna for this usually mounted on the top of the aircraft.
You can see what this antenna looks like in this picture:
http://www.!!!!!!!!!!!!!!/open.file/991536/L/
From the ground station, there is onward connectivity to the Internet, allowing continuous coverage throughout the flight.
Hope this helps!