If you dig into their sites, there are some general descriptions. My understanding is that they partner with ISPs, toolbars and the like to get data on people's browsing habits.
So small time ISP might share what sites are being visited, so they extrapolate on that. Alexa uses a toolbar, for example. So they know what sites people are browsing.
Quantcast lets you add your own codes, so then you get an actual measurement of traffic.
