I really want to draw you a diagram! The architecture I describe below is a classic Ajax approach.
Firstly, this approach involves generating XML content on the server usually from a database or some other enterprise level application, although you can create static XML pages from software such as Office 2003.
There are many toolkits and cross-browser libraries that you can use. I have worked with the Sarissa library quite a bit. Others include Backbase, Bindows, Dojo, qooxdoo etc.
I hope that helps.