This question is really not in the appropriate forum, but if you're curious how VPNs work I'd suggest this link
. Basically what the poster is talking about is connecting to a VPN, then from there to another VPN, etc. TOR is useful as it does this automatically for you, switching you between half a dozen or more 'nodes' before arriving at your final destination.
In laymen, you know in movies when they say "I can't locate the source of the transmission because they're bouncing it off a dozen servers"? Basically that's what VPN and TOR do is route your traffic through other locations to disguise its origin.
I understand vpns, I'm actually using one right now.
I understand proxies too. What this guys is doing is using virtual servers as proxies. I do not understand how this is done. Also, what IS the appropriate forum, please?