How does Over-the-air updates (OTA) work
CyanogenMod ROM has a built-in Updater application which can periodically (or manually) check their servers for a new release of the ROM.  Your current ROM version and date stamp are sent (in a completely anonymous way, no identifiable information is sent for privacy reasons) to their servers, and any new versions are returned.  The user is then presented with a notification, and can choose to download the update (entire ROM actually) and automatically or manually flash it via Recovery.