I don't even understand how the signals work. Is there some info on this somewhere?
There many ways to achieve signal control but basically you need devices that respond to the presence of trains in certain locations on your layout and send commands to other devices that display the desired colors on the signals.
In Ken's case the "brains" of the operation is a fairly popular computer program called Train Controller (TC) which, as its name implies, is use to control trains on model layouts.
The program receives input from devices, called "occupancy detectors", which detect the presence of trains in various sections of the layout called "blocks" - Ken uses Digitrax BDL164 devices. Based on these inputs the program controls the colors displayed by the various signals positioned around the layout via another kind of device designed to drive signals - Ken uses Digitrax SEC8 devices. Ken has configured TC with "logic" to process the inputs from the occupancy detectors and set the signals according to the way he wishes them to work.
The benefit of using a program like TC is that you are free to control the signals as you see fit, from something very basic to a full blown implementation of some prototypical signalling scheme.
Another approach to controlling signals uses dedicated hardware to process the input from the occupancy detectors and control the signals but this is far less flexible then using a computer program.
But controlling signals is just one feature of TC. It can control your turnouts, your trains, your turntables - just about any controllable device that you might find on a layout. TC allows manual control, semi-automatic control, fully automatic control of your layout and more. Clever folks have even figured out how to have TC drop off and pick up cars at the various industries that they have on their layouts.
On my layout one of my goals is to have engines leave the roundhouse, via a turntable, travel to the passenger yard, couple up to waiting trains at the passenger station and proceed around the layout, eventually returning the trains to the passenger station, uncouple from the trains and return to the roundhouse - all under control of TC. While this is happening I can be manually controlling a freight train and service the various industries that I will have on my layout.
To a large extent what you can do with TC is limited by your imagination and your wallet.