A group of people get together via a chat setting (*Normally Gchat, Skype or Chatzy*). They chat and introduce themselves, sometimes setting goals for their writing session or mentioning what they have to start with.
At a set time, usually either :00, :15, :30, :45, etc, everyone wanders off to focus on their writing. A pre-determined time later, everyone comes back to the chat area in order to tell if they met their writing goal (usually a word count), share teasers of what they wrote during the WC and ask for any help that they feel they need.
You can find scheduled ones or check Twitter for some practically at any time. I'm a WC Leader for The Twilight Awards and host one every Wednesday evening at 9:00PM, EST. Most last from 30 minutes to an hour, depending on the host.
If you aren't sure about doing one, just join in, you have nothing to lose and everything to gain. Plus you can find some great friends along the way. I personally find that they help me focus more and I've also found some really good stories as well.
*Gchat* is the chat system featured on Gmail. It's the most often preferred means of WCing, especially for pick up ones. There is a small section (on the left-hand menu, underneath your mail options) where you can add people's email addresses to be able to chat with them.
*Skype* is "Software that enables the world's conversations. Millions of individuals and businesses use Skype to make free video and voice calls, send instant messages and share files with other Skype users." Basically, Skype has a chat system that works similar to Gchat, but you get booted off a lot less, lol.
*Chatzy* is "A free private chat service which you can use to communicate with people you already know or people who visits your blog or website. With Chatzy you can create a chatroom and send out email invitations very quickly and easily. No registration is required." It's lesser used in WC's ( my experience at least), but it still works rather well. It caps a room at about 10 people.
If you're holding a larger WC, your best bet is Skype. It's much more organized and can hold more people.