It is probably easiest to understand how this system works by tracking a message from the mailing list to the newsgroup and then a message posted to the local newsgroup (and gated to the mailing list) and see how they are handled.
When mail from the mailing list arrives at the local machine, procmail figures out what newsgroup it belongs in, and pipes the incoming message to mail2news.
The mail2news script processes the message, applying news headers and then uses rnews or inews to post the message to the newsgroup.
The local newsgroup is set up as a moderated group, as this allows us to take advantage of the email capabilities of innd. Any messages posted to a moderated group are not immediately submitted to the group. Instead, messages are emailed to the moderator of the group.
By declaring the moderator of the local newsgroup to be mailing list address, all locally posted messages to the newsgroup are automatically mailed out to the mailing list by innd and only appear once they have been received back through mail2news which adds the necessary 'approved' line to the messages and are thus acceptable to innd for posting to the newsgroup.