Tor options are configured in your torrc file (
/etc/tor/torrc on Linux/Unix, probably somewhere in
Program Files on Windows).
In it you can set lots of options like:
To list all valid options you can run
If you're comfortable with the command line, there's a nice interface for Tor called
arm that will show you a lot more information than Vidalia does (including what nodes are in all of your current streams). More info on that here: https://www.torproject.org/projects/arm.html.en
As for how the actual network functions, info on that can be found on this page: https://www.torproject.org/about/overview.html.en#overview
I'll also write up a basic overview below.
A Basic Overview of how Tor Works
In brief, there are several Tor nodes that are trusted called 'Directory Authorities.' These nodes contain a list of all other public nodes and some metadata (fingerprint, exit policy, bandwidth / rate info, etc.). They also vote on various properties in the tor network (what nodes are bad, what nodes are included in the directory, etc.). When you first create a connection to the Tor Network you download a list from these directory authorities, and pick three (by default, there's no real reason to change this either) nodes to use.
Then you start sending traffic by encrypting first to the last (or 'exit' node), then encrypting your traffic again to the middle node, then again to the first node. Then you send the encrypted traffic to the first node who decrypts it, sees that the second layer is for the middle node, sends it on, the middle node decrypts the next layer, and sends it onto the exit node which decrypts the final layer and sends it on to the final destination (eg. 'stackexchange.com').
Then the whole process happens in reverse. In this manner, the first node knows that you're sending traffic, but now where the traffic is going, the second node just knows that someone is sending traffic (but not whom or where it's going) and the final node knows where the traffic is going but not who sent it in the first place).
This question was a bit vague, but I hope I answered it all. Let me know if I missed anything.