Refractometers work by bending light through a prism. The thin film of wort on top of the prism changes the refractive properties and the user sees a line that indicates what the percentage of sugar is.
The sugar scale is based on pure sucrose, but there is effectively no difference in a reading with maltose. *Full disclosure: my opinion on this point is contradicted by a bunch of articles that say there's a difference, but don't agree on how much difference or that it matters by more than a tiny fraction of a percent. In other words, the error doesn't amount to even 1.003, until you're at gravity >1.120.
Refractometers need very little liquid, which means it cools quickly. This is especially helpful in getting ongoing gravity readings during mashing, sparging, pre boil and post boil.
Since sugar changes the refractive index, a lack of sugar will, too. Same with the presence of alcohol. So, refractometers are not typically used after fermentation has begun. I would recommend investing is a "finishing" hydrometer that has a scale of 0-8 Plato (1.000-1.032). They're a bit pricey (>$US20), but can be kept in a protective box or the hydrometer jar on a shelf.
BeerSmith has a refractometer tool that offers calibration plus correction for fermenting and finished beer. Also, Brad's article on the subject is here: http://beersmith.com/blog/2010/11/02/how-to-use-a-refractometer-brix-and-beer-brewing/