CTCSS stands for Continous Tone Coded Squelch System. As explained in the CB controls page it is basically a tone that is transmitted along with your transmission. The receiving radio will decipher this tone and receive you if you are generating the correct tone. This is done by means of Integrated Circuits inside the radio. Example:
You might transmit generating a 100Hz tone, and the receiver will only receive transmissions that contain that tone, so you get through. You generate a 110Hz tone and the receiver will ignore you and you will not be heard. If the receiver is in 'open' mode (no tone control swtiched on) it will recieve you as normal.
That is all really that CTCSS is, there's nothing complicated about
its understanding. It can be costly to install in some radios though.
Wikipedia CTCSS Reference