Can anyone explain the Character Customization example project?

The Character Customization project (http://unity3d.com/support/resources...rcustomization) somehow combines meshes into a single boned animated mesh, but unfortunately the project doesn't come with a good description of how it is done. It is up to us to dissect the project and figure it out.

Can someone PLEASE explain how the meshes are combined and use a single skeleton with weighted vertices from a CONCEPTUAL level? Diagrams are always helpful when trying to understand things from a conceptual level.

In the project I see that it makes collections of materials, bones and meshes that are combined and somehow work. How do the vertices know what bones to use after combining? I thought bone weights referenced bones by index, not name, but this seems to somehow be using bone names. Please explain.

A simplified example of combining meshes into a single animated skinned mesh would go a long way for a lot of people. Mixing this topic with AssetBundles just complicates the subject. Am I crazy?