As above says you are simply bouncing the light off something (wall ceiling etc) some people put a bit of card behind the flash head to throw some light directly forward as well, some flashes have these pull-outs built in.
One point to remember is that the thing your bouncing off needs to be white (or light coloured at least) or it won't reflect the light and coloured walls ceiling will reflect the colour and affect colour balance. They also need to be reasonably close, bouncing off clouds (yes seen it done) just doesnt work.