FinderSync keeps track of the windows that are open in the Finder and 'listens' for changes in the filesystem. When a folder changes, the Finder is informed so it can immediately update the affected window(s). Although the Finder is definitely better about updating its windows than it was prior to 10.3, there are still some cases where it can use some help. For the most part, you won't notice FinderSync running because it seems completely natural. FinderSync is implemented as a prefpane.