Do you mean how do they create the ebook or how do they upload the book to the site?
I want to do the former myself and the "free" way to create an ebook is to use Open Office - which is huge application to upload to your computer. I have yet to try but it but recently found out about Google/Docs. Like Open Office you can save a document in PDF format, so it can be opened by Adobe Reader. I recently saw a video on using Google/Docs and it seems quite simple, and its not a huge application like Open Office.
Whatever you use, you still have to write something - which I keep putting off by posting here, using Twitter, etc!
I have uploaded other PDFs to my
site. You upload through an FTP or from within your cpanel to a folder on your site. Then link within the text as if you would to anything external, or a photo, just linking to where you have put the file.
Hope this helps, but say if I've missed what you were asking or want me to expand.