Well, if I knew totally how they worked I could have built my own! Seriously, a QUALITY film scanner is not cheap. Forget the silly little things you see advertised for under a $100 to scan 35mm film. They are next to worthless.
I use a Nikon 9000 film scanner, which is widely regarded as one of the best. A drum scanner is better, but these cost upwards of $10,000. The Nikon is relatively "rare" in that only a few dealers carry them, and they are often sold above MSRP. I paid over $2500 for mine, then also bought the needed glass holders, which are $300.
A quality film scanner uses a CCD to scan the negative, sort of along the same principle as the CCD sensor in a digital camera records data. The scanner can scan the negative at TRUE high resolution. This scan from the original negative is of FAR higher quality than a normal flat bed scanner which is using a light source to merely "take a picture" of a print.
Here is a link to the Nikon scanner at B-H, though they no longer have them in stock, (and never do). They pretty much all have to be purchased from photo dealers on Ebay.
http://www.bhphotovideo.com/c/product/310478-REG/Nikon_9237_Super_Coolscan_9000_ED.html
There are alternatives to the expensive Nikon scanners though. The Plustek Opticfilm 7400 is reviewed to be very good, and at much less cost. It however, can only scan 35mm, whereas the Nikon 9000 can scan 35mm and medium format film:
http://www.bhphotovideo.com/c/search?Ntt=plustek+opticfilm+7400&N=0&InitialSearch=yes
Epson Perfection series of scanners are good for what they are, which is flatbed scanners. They have the ability to scan negatives, but also can scan prints and documents. The V300 is the newest in the line up, though the V750 Pro is considered the best of the line up:
http://www.bhphotovideo.com/c/search?Ntt=plustek+opticfilm+7400&N=0&InitialSearch=yes
The V600 is considered a good compromise between quality and price:
http://www.bhphotovideo.com/c/product/647187-REG/Epson_B11B198011.html
Something you want to have in any film scanner is Digital ICE. This is a function by which the scanner automatically removes, (electronically with an infrared capture), dust and scratches from the negative. No matter how hard you work to put a clean negative into a scanner, there WILL be lots of dust specks that will drive you crazy trying to clean up with the clone tool in Photoshop afterwards.
In general, scanning can be very time consuming and lots of work. When I get film processed, I typically get a CD of low res scans done at time of processing. This gives me digital files perfect for web use and even small prints. I save my own scanning for only certain photos that I want the maximum quality from and from which I will be printing at larger sizes.
Here are some sample scans done with my Nikon from medium format film taken with a Mamiya camera. These of course are greatly downsized. The original 16 bit Tiff files from the scanner are HUGE.
http://www.lightanon.com/-/lightanon/detail.asp?LID=&photoID=10396105&cat=92463
http://www.lightanon.com/-/lightanon/detail.asp?LID=&photoID=9390011&cat=92463
http://www.lightanon.com/-/lightanon/detail.asp?LID=&photoID=10026666&cat=140325
http://www.lightanon.com/-/lightanon/detail.asp?LID=&photoID=9595980&cat=92469
steve