It's basically CBT tailored towards insomnia. Identifying and addressing behaviors and thought patterns that make it difficult to sleep. Sleep hygiene, mindfulness, etc.
One important part of CBT for sleep is education about "sleep hygiene". This is the set of optimum behaviors or practices that promote sleep. Salient elements include establishing and maintaining a suitable sleep schedule, especially arising at a consistent time. "Winding down" well before bedtime, and minimizing light exposure in the evening will be helpful. IOW turning off light sources at the right time is encouraged.
That light exposure part is getting a lot of discussion re: computers, phones, TV's, etc., being produced with ever brighter screens. Idea is that staring at a "device" activates the wake-drive and interferes with sleep onset.
Other CBT measures aim to promote relaxation, reduce anxiety and "over-thinking" when it would be counterproductive. Put another way, reducing arousal at night is the goal.
Goes without saying particular approaches will vary with the individual, but these are some of the basics.
I can't say how effective it is from a scientific perspective, but since it will be mentioned at some point in this discussion I might as well bring it up now:
F.lux has become an essential tool for me. It changes the color temperature of your monitor, reducing cool/blue light and replacing it with warmer tones, which should helps getting good sleep. It does for me at least. Wish it was available for nom-jailbroken iPads though.
It is a ~6 week CBT course that teaches you to have good hygiene, while at the same time understand what is preventing you personally from sleeping well, and developing your own routine.
This article on a site I manage provides a great overview of sleep hygiene and other behavioural changes needed for good sleep http://en.hdbuzz.net/120
I know what it is in general, but how does it relate to sleep?