Well, a person in the group begins with a plastic tote that they fill with unwanted items from their house (how many of us don't need to declutter?). Then they pass it off to the next person. That person takes what they want and adds more to the bucket. When it reaches the first person, they look through the stuff and take out what they put in there originally that still remains (which they will donate or throw away). And then it continues around.
This would be a good thing for a group that meets somewhere regularly, like a knitting club, a Sunday School, a bunch of coworkers, etc. That way they bring it to a place they normally go and can pass it off to the next in line there. We actually are a Yahoo group that live in the same town, but we've set it up so the ones that normally drive past someone else is who they pass off to.
One way it's different than donating to the thrift store is you can put things in there that are still useful that a thrift store wouldn't take. Like half used lotion, makeup colors you don't like, or shelf stable food you may have opened but don't like that's still good.
Things I have gotten from the chest to give you an idea: partially used face soap, an opened bag of dried fruit someone didn't like that I used in cookies, a vase, fabric scraps, clothing for my child, a DVD, toys that a kid got bored of, a garlic peeler, etc.