To expand on criss's answer, it's basically transparent to the controller.
Here in the UAE, the transition altitude (TA) is 13,000 ft, and the lowest available flight level is FL150 (as opposed to most places where the lowest usable FL would be whichever is separated from 13,000 ft by 1,000 ft or more). Our radar screens are set with a TL of FL145. We manually input the QNH (pressure at MSL) into the system. At and above FL145, the display shows flight levels. Below FL145, it shows altitudes based on the QNH without any calculation required by us.
To expand a little further, as bookworm says, altitudes are used for separating aircraft from terrain as well as from each other. However, the atmospheric pressure at MSL can vary enormously over relatively short distances (especially when it's windy, for the meteorologists among you!). I've seen a helicopter on the radar about 70 NMs away, displaying an altitude of MINUS 200 feet, simply because of the pressure difference over those 70 miles. Our radar showed information based on the pressure at our location only.
Thus, when aircraft need to be separated from each other over long distances and are well above terrain, flight levels are used so they're all on the same pressure setting.
When aircraft are close to an aerodrome and terrain needs to be taken into account, the QNH is used. We have no way of knowing what the exact atmospheric pressure would be at mean sea level where the aircraft is; only at the aerodrome. Even in that case, it's actually a calculated pressure as we can't bore a hole down to MSL and place a barometer at the bottom! In essence, QNH will be used within 40 NM or so of an aerodrome so we have reasonable assurance that it's close enough to the actual MSL pressure at the location of the aircraft, and in any case we're using a minimum of 1,000 ft separation above terrain just in case. It also means that all aircraft within that bit of airspace are on the same pressure setting, and thus can be separated from each other using vertical separation.
As an aside, for those of us using Flight Refueling kit on which we input the QNH manually, there is possible embarrassment as the pressure drops out after 2 hours and must be entered again. If you don't do so, it reverts to 1013 below the TL. If you don't notice the pressure display flashing and then disappearing, verifying an aircraft's Mode C becomes interesting to say the least!