Imagine that you want your web page to send a message "gphil clicked this link X" back to the server, but you're only allowed to request information, not gather it. The work-around that we use in web analytics, is that we request an image named "link-clicked.gif?dude=gphil&link=X." The query parameters are built dynamically with JavaScript and the image request is added as an on-click call on the link. The server is configured to accept this request and parse and log the data from the query parameters, and meanwhile returns a .gif image consisting of a single transparent pixel. This script apparently doesn't even render the pixel, it just stores it somewhere.

Advanced techniques include noscript fallbacks and adding a timestamp to prevent client or server caching from messing with your data collections.

No idea what pixel-tagging is but it seems they use javascript to load an image. The url of the image tells Google which link has been clicked on. There's some extra information in the url as well.

I think it is just an invisible 1x1 image on your website, that is being served from Google. So everytime your web site loads, google gets a request for that pixel, including cookies and referrer.

As described here, I think they just trigger image loading from JavaScript to transfer information to the server.

Typically it's called a beacon, but wikipedia calls it "web bug": http://en.wikipedia.org/wiki/Web_bug