You play a melody or riff, and the loop station records the riff, and plays it until you tell it to stop. You can look at it as either a tape recorder that has endless tape and endless repeats, or a very precise and controlled delay.

EDIT: More expensive loop stations have overdubs and you can create multiple layers. Fundamentally, one could play an entire song live if given a few minutes to record each riff and instrument, although it would have to be a relatively simple song.
Traynor YCS-50>EHX SMM w/ Hazarai>EHX DMM>EHX Holy Grail>EHX Small Stone>EHX Big Muff PI (NY)>EHX Pulsar>Ibanez TS-9DX>Echo Park>Ibanez Vintage Tubeking>Fulltone OCD>Zvex Fuzz Factory> Roto-Machine>Fulltone Wah>MJM London Fuzz>Fender Strat
Last edited by HeartInACage at Jan 30, 2007,
they can record something you play, like a rythm, and then you can play them while you play a solo. So its like a guitar backing track.
*peavey valveking head and cab
*Jackson king v
*Shure wireless system
*dunlop crybaby from hell
*digi-tech bad monkey(boost)

They are pretty expensive though.
Some can record longer, some even have built in effects etc.
I wouldn't recommend one unless you really need it.