Drupal 6 Technical Overview
Whats Missing?
Blocks
Regions
Rules
Triggers
Tokens
Actions

Drupal is a large framework, there are some concepts that are not expressed in this diagram.
How does a hook work?
Responding To
A Hook
Writing Hooks
Hooks allow you to execute code at various points in the drupal program execution.
Modules can 'write hooks' that you can hook into (respond to).  The abililty for module
authors to both write and respond to hooks allows modules to build off of each other
and hilights drupals extensibility and community levearge.
What's a hook?
The basic struture of a hook is a for loop that
checks for the existence of a series of function
names based on a list of module names and the
desired hook name, and calls any functions that match.

A developer can implement a hook loop at any point
in their code.
http://api.drupal.org/api/function/module_implements/6
http://api.drupal.org/api/function/module_hook/6

Drupal is full of hooks, which are special function
names that you can write into your module.  Drupal
will look for the function name of each hook, and if
it finds one, execute it.  This allows you to "hook into"
any point in the script execution to modify objects and
change what happens.
Any module can respond to a hook that has been written 
by another module.
http://api.drupal.org/api/function/hook_form_alter