they put your name address phone number etc in the chip and inject it into the fleshy bit near the head of your dog, it's just like a regular shot, quick and easy.
That way if your dog runs off, a vet or the SPCA can scan your dog and find out where you live etc. I also have a tag on my dog's collar with his name, address and phone # in case he runs off and a regular person finds him, this did happen once.