Getoutofmyway, welcome to Reefs.org! If you haven't already,please take a moment to check out this URL to help you get the most out of your Reefs.org experience:
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On to your question:
A closed loop is basically a canister filter without the canister - an external pump with a plumbed intake and return. The pump and plumbing can be beefy, like what steve f posted, with drilled intakes and returns, or it can be as simple as an external pump or powerhead with flex tubing attatched to the intake and return, or it can be a combo in between. Many people use them instead of putting powerheads into a tank for circulation, because they take up almost no room, and not very intrusive, and don't add heat to your water. I don't understand why more people don't use them.
I do mine with threaded pvc instead of flex tubing that goes over the lip of the tank, so there is no drilling. This way, it is easy for me to service the pump if needed, and easy for me to direct the water flow wherever I want it to go.
If you do a search on 'closed loop' you will find much discussion. They can get pretty esoteric, but remember the concept is really really simple.
RR