LCD panels are made of two layers of a glass-like material, which are polarized, and are "glued" together. One of the layers is coated with a special polymer that holds the individual liquid crystals. Electric current is then passed through individual crystals, which allow the crystals to pass or block light to create images.
LCD crystals do not produce their own light, so an external light source, such as florescent or LED bulb is needed for the image created by the LCD to become visible to the viewer.
Unlike standard CRT and Plasma televisions, there are no phosphors that light up, and, thus LCD panels are thin and require less power to operate. Because of the nature of LCD technology, there is no radiation emitted from the screen itself, unlike traditional televisions.
Unlike a traditional CRT televisions, the images on an LCD TV are not "scanned" by an electron beam. The pixels of an LCD Television are merely turned off or on at a specific refresh rate. In other words, the entire image is displayed (or refreshed) all at once every 24th, 30th, 60th, or 120th of a second. For more specifics on what refresh rate is and how it works, check out my article: Video Frame Rate vs Screen Refresh Rate.
However, LCDs do not produce there own light. In order for an LCD TV to produce a visible image the LCD chip pixels have to be "backlit". What happens is that the pixels are rapidly turned on and off depending on the requirements of the image. If the pixels are off, they don't let the backlight through, when they are on, they let the backlight through. For a more technical look at how this process works, check out: How LCD Works (How Stuff Works).
Also, without the need for a picture tube, LCD TV can be made very thin, thus allowing them to hung on a wall or placed on small stand on top of a table, desk, dresser, or cabinet very easily.
For more on what an LCD TV is, also view our About.com Video: What Is an LCD TV?.
Combining the above technology with the features of a traditional television, such as, AV input/output connectivity, side or bottom mounted loudspeakers, TV tuner, and traditional television adjustment controls, bring to life a concept that is becoming a popular option for TV and home theater viewing.