Complexity of a recursive bignum multiplication algorithm
The idea is to divide each $n$-bit integer into two halves of $n/2$ bits. For example, $10100010$ would be divided into $1010$ and $0010$. Naively, we would need to multiply four such halves, but in fact there is a way to do with only three. (This is similar to matrix multiplication algorithms such as Strassen's.) The algorithm described by the exercise is known as Karatsuba multiplication.

Regarding your other question, once you have reduced the computation of running time to a recurrence relation, you no longer need to understand anything more about the recursion in order to compute the running time - this is the main point of this abstraction.