To understand that command (or script), you also have to read manpages of
gzip and patch too.
That command consists of tree separate processes.
- First one prints the contents of /path/to/openMosix-2.4.16-3.gz to
the "stream" (in basic case, to the screen, but in this case to input of the next process).
- The second process (gzip -d). Reads compressed data from the input stream (in a basic case, this would be the keyboard), decompresses and writes the decompressed version to the stream.
- The third process reads difference-information (aka diff, or patch-file. Normally generated with a program called diff) from the input stream and tries to do those changes described to the files in the system (eg tries to apply a patch).
To make long story short, those three programs together uncompress and apply a patch to your files.