Perhaps better to explain what any boot loader does.
The bootloader is simply the code that loads the first executable code into memory and then transfers control to it. Depending on the system, intermediate stages of boot code provide some smarts on the filesystem to assist is the later stages.
Here is one very good writeup (Windows-centric, but still applicable): http://www.ata-atapi.com/hiwmbr.htm
Also, take a look at the GRUB manual http://www.gnu.org/software/grub/manual/grub.html