Trying to wrap my head around how skip mode works

So, I record a program and obviously the recording includes the commercials. What mechanism is at work to make my TiVo skip past these segments? Or are my recordings somehow replaced by the TiVo abridged recordings? If not replaced, is TiVo sending something to my unit to jump over the ad on the fly? What if the Internet connection is down?

Signed,

Perplexed

Trying to wrap my head around how skip mode works