Through a radiator which will cool the water down via air passing through it. Then through an optional resivoir, and through a pump.
Edit: That was a little hard to understand. Basically, water is pumped through the waterblock, mounted on the processor, which will transfer the heat from the processor to the water. From there, the water is pumped through a radiator, which transfers the heat from the water to the air, and hopefully out of the case.