Interactive whiteboard works on the basis that it is the same as a normal whiteboard, you can write anything you want on it. Interactive whiteboard differs in that it is linked to a computer, so any item on the computer can be opened on the white board and then be edited.
Department of Education and Training Western Australia (2009) supports interactive whiteboards as an educational tool within schools
As schools move progressively into a digital learning environment, interactive whiteboards are being widely adopted in primary and secondary classrooms.
Connected physically to a computer and a projector by a USB cable, or wirelessly using technology such as Bluetooth, the whiteboard display typically emulates the computer mouse and keyboard and is operated by using a special pen, or finger touch, depending on the model. Either front or rear projection models can be used and software is available to support all learning areas.'
Watch this short video found on YouTube (2009) which shows a Social Studies teacher demonstrating to his class how interactive whiteboards work:
YouTube - Interactive Whiteboard Demonstration
Department of Education and Training Western Australia 2009, 'Interactive Whiteboards', View19 August 2009, http://www.det.wa.edu.au/education/cmis/eval/curriculum/ict/iwb/index.htm
YouTube 2009, 'Interactive Whiteboard Demonstration', Viewed 19 August 2009, http://www.youtube.com/watch?v=DjdNPMZJbLs