It's actually ridiculously simple. They're not really scripts, as much as a list of commands w/ parameters that I can type out in the editor.
So it just breaks it up line-by-line, determined which event to queue up based on the name, and passes that event the parameters. For example:
CameraTo(500, -1000, 1.2, QuadIn);
Fade(1.0, 0x000000, 1.2);
SwitchScene(OtherArea, 0, 1);
Fade(0, 0x000000, 1.0);
That will disable all IActor objects (eg. disable player from controller, disable enemies). For in-game physics objects, it will disable their behavior components and make them just default to regular non-controlled physics (so in the case I want to move them around with events, I can do so).
Then, the camera will move to the target position in 1.2 seconds using a quadratic ease-in, and at the same time the camera will fade to black. The Wait() is a special type of call that suspends the event queue until all currently active events are finished (in this case, the Fade() and CameraTo(), and then it will switch the scene (opening up a level called OtherArea).
The event queue is persistent across scenes, so then it will DisableAll() in the new room, fade back in, and when that is done, it will re-enable all the actors.
Scripts will have control over other things too, such as particle emitters, screen effects, all in-game actors, and the speech/dialogue system.