THink of it this way, if you have been around a bulk milk tank and the compressor that cools the milk - it takes the heat from that compressor and ciculates it through the air ducts of the house. In the summer, it takes the cool air and circulates it . . . . It uses loops of liquid (glyco) to help retain the heat / cool, circulating in a temperate zone (water / earth) to keep the system at a even temp. this isn't exactly how it works, but a simple rendition . . .

http://www.earthtoair.com/how-geothermal-heating-and-cooling-works.php