How do the Infrared Towers work?
IR Transmitter Tower exist in both USB version as well as Serial cable version.
Page 7 of instructions for one of the sets (3804) that was using USB version has following explanation:


Transcription:

The IR Tower establishes a wireless link between your computer and the
RCX. With the IR Tower, programs can be downloaded from computer to
RCX. These programs can then be executed (run) by the RCX.
The IR Tower uses infrared signals to send messages.
For communication to occur, the RCX and IR Tower must be able to see each other. Even through 4-6 inches (10-12 cm) works best for downloading, in optimal lightning conditions, communication is still possible at distances up to 90 feet (30 meters) away.
To Download firmware to your RCX:
Make sure your tower is plugged in and your RCX is turned on. Run the Robotics Invention System™ software and click the Settings button on the Main Menu. Click the button for downloading firmware.
Downloading takes approximately 4 minutes. The Software Watch counts as the firmware is downloading and will beep when it is done, do not switch off or move your RCX while downloading.
For more informations about setting up your RCX to work with your PC go to Settings.

And it also contains (rather obvious) picture of supposed use: