If you are thinking about the square Worm Factory, here is a detailed explanation by the manufacturer:

http://www.cascadewormbin.com/worm-factory-composter.html

If you are thinking about the round COW (Can-o-Worms), it is the same basic concept, just larger. You begin with one tray and once that is mostly processed, you add the second, and then the third. Each tray has holes in the bottom through which the worms migrate. Once the bottom tray is mostly compost, you harvest. However, there will always be some worms and cocoons in the compost that will need to be relocated.

You don't need to buy the pre-made bins which can be pricey. You can use the same basic concept can be used with cheaper storage containers. You do need to put LOTS of holes in the bottom (I used 1/2 inch on the recommendation of another vermicomposter.) Some people set the next bin/tray directly on top of the VC. The guy I copied puts lots of holes in the lid of the container and sets the new bin on the lid, so that the VC isn't compacted by the weight on top of it. You need to be sure that the VC in the bottom bin is in contact with the lid so the worms have a way of getting up. There are lots of ads for Can-o-Worms and other stacking systems that you can see to get an idea of how they work.

The guy I got my ideas from has posted his photos on http://vermicomposters.ning.com/photo/photo/listForContributor?screenName=30voz6g21ypl6

Personally, I use storage containers that are available at Walmart or hardware stores that are half the height of the standard rubbermaid. I figure the more surface area for air, the better.

The other system I use is the flow through. Check out the thread 'my flow through bin'. It's long but excellent.

I think what makes it hard to visualize is that it takes a while for them to migrate.

Wait until you have mostly compost in the bottom bin, add the top bin with nothing solid blocking the holes, fresh bedding, then food. They will move but it will take a few weeks in my experience. And there will still be some stragglers.

I agree with susanfromhawaii. Why buy when you can easily make your own DIY worm farm for a fraction of the cost?

Here is a link that might be useful: How to Make Your Own Worm Farm

Another sure way of getting worms to 'move up' a level- this is especially good for those of us who can't resist 'checking' on our worms regularly- is to grab any cocoons (worm eggs) you see in the lower layers and put them in the newest level. Baby worms don't tend to stray far from where they are hatched until they run out of food. I think I read somewhere that the second advantage of this is that rotting material stimulates eggs to hatch.

Some of this ground was covered in previous article

Here is a link that might be useful: Basics 101

I made a bunch of DIY bins for family last Christmas. To save myself from having to answer the same questions over and over, I posted some "how to's" to help them out.

Some of these may be helpful to you too! :)
How to Build a Worm Box:
http://www.ehow.com/how_4769967_build-kitchen-worm-composting-box.html

How to Fix a Worm Box That Smells:
http://www.ehow.com/how_4770017_fix-worm-composting-bin-smells.html

How to Harvest Compost from a Worm Box:
http://www.ehow.com/how_4769994_harvest-compost-worm-box.html

Good luck and happy composting! Worms are great!