It's a plastic insert with a hook thing. You cut the insert to the correct length then remove the seatpost and fit it again with the plastic insert around the post. The hook part fits into a slot.
Even having fitted it I don't know how it works but mine's been in for over a year and it works perfectly. Pull the seat post up and the insert stops it going any further than I need. Great for dark, wet nights when you don't want to be looking for marks on the seatpost and just want to be on the bike as quickly as possible.