A typical ABS is composed of a central electronic unit, four speed sensors (one for each wheel), and two or more hydraulic valves on the brake circuit. The electronic unit constantly monitors the rotation speed of each wheel. When it senses that any number of wheels are rotating considerably slower than the others (a condition that will bring it to lock) it moves the valves to decrease the pressure on the braking circuit, effectively reducing the braking force on that wheel. The wheel(s) then turn faster and when they turn too fast, the force is reapplied. This process is repeated continuously, and this causes the characteristic pulsing feel through the brake pedal. A typical anti-lock system can apply and release braking pressure up to 20 times a second.
Oh yeah - they do stop the car quicker. Though normal driving would not usually release the benefit of ABS - you've really got to dive on the brakes to feel the effect.