Basically you split the signal into two frequency bands, process the two frequency bands with effects, and then combine the two frequency bands back into one channel before sending it to your amp.
Yes exactly; my curiosity is now peaking on what it would sound like to use said freq. splitter for distortion and compression before sending to amp and then bi-amping into a couple dif range cabs.... Haha I suppose there's always a 'what if?' isn't that the beauty? Lol