Thermal images work a little like the human eye. Only instead of picking up on visible, reflected light, thermal imaging devices detect the heat released by an object.
As you already know, objects both hot and cold emit heat. As that heat moves outward from the object, a thermal imaging device can see it. Like a camera, these devices have an optical lens, which focuses the energy onto an infrared detector. This detector has thousands of data points so that it can detect subtle changes in temperature, from about minus 4 degrees Fahrenheit (minus 20 degrees Celsius) to 3,600 degrees Fahrenheit (2,000 degrees Celsius).
Then, the detector constructs a thermogram, which is basically a temperature pattern. The data from the thermogram is transformed into electrical signals and zipped to a processing chip in the camera. That chip converts the thermogram's raw data into visual signals that appear on a display screen. The whole process works very quickly, updating about 30 times per second.
Many imagers show objects as monochrome pictures, with hotter areas shown as black and cooler areas as gray or white. On a color imager, hot objects jump off the screen as white, yellow, red and orange, while cool areas are blue or violet. These are called false color images, because the device artificially assigns colors to each area of the image -- unlike a regular camera, which creates true color images that show objects as they appear in real life.
Depending on the relative warmth of each object in view, the resulting image may offer striking visual detail, such as a full picture of a man holding a gun. In instances where temperature gradations are less distinct, the image may be fuzzier and less definitive.
Picture quality changes depending on whether the imager is active or passive. Active systems actually warm the surface of a target object using a laser or other energy source in order to make it more visible to its detector (and also anyone standing near the target area). For example, some car manufacturers warm vehicle parts as they pass through the factory, making any flaws in construction more visible to thermal cameras. Passive systems just detect the heat that the object emits naturally. Both systems have their pros and cons, but the simplicity of passive systems makes them far more common.