How does facial recognition work?
The simplest Face Recognition 101 would be run a PCA on the data, followed by a K-nearest neighbor classification. 

but now there are more advanced techniques that you pick along, it might be using "better" classifiers like SVMs or Neural Networks or apply Bayesian learning, but then, as you move up the knowledge tree, you will realize you need your data itself to be more robust.. so you will then want to learn about about SIFT and other techniques.

One of the nice places you can start looking for papers and algorithms is face-reg 

Have fun learning :)