Well, here's a good starting point.
http://en.wikipedia.org/wiki/Effects_loop
I use my effects loop for sending the output of the preamp part of my amp head to my rack compressor unit and then from the compressor unit into a exciter rack unit. From the output of the exciter unit, the signal is fed back into my amp head via the "effects return" socket, which is connected to the power stage of my amp.
The effects loop typically operates at a signal level suitable for rack equipment, so it's not usually suitable for use with stomp boxes, as pedal type effects are expecting the lower signal levels that you get straight from your bass.
I hope that helps!
