The following information was very kindly written and supplied by Osram from the BoB DG

"With modern flight Sims like BoB, the flight model, weapons model etc are extremely realistic. Apart from the missing danger of death or serious injury, which is one reason to fly simulators, the remaining source for reduced realism is input/output. When using standard PC equipment like a monitor, mouse, keyboard and joystick, especially if you want to learn how to operate a WWII warbird and have the satisfying feeling that you would be able to take off in one in real life, you need a cockpit with working levers, switches, and gauges. This means that the switch settings are transferred into the simulation and once the simulation has calculated the new situation of the plane the values are transferred into the gauges.
With situation I mean things like speed, orientation, engine temperature and 100s of other details.

Let's get a bit more technical:
The BoB.exe could itself poll the hardware for switch positions etc. Since different 'pits will have a different layout in the computer's memory, the program source would need to be tweaked. A modern day entertainment sim is one of the most complex computer programs around and to force each sim 'pit builder to tweak and recompile it and use the tools that BoB needs would be a bad thing.

So, the idea is to have a 2nd, very small and easy to understand program that translates between the hardware and one interface that the BoB.exe understands. Such an interface already existed in the form of the memory-mapped files used by Falcon 4. The memory-mapped interface has no disadvantage via other methods like using a DLL. But by using it we make it easy for people that already worked with it for Falcon. We are able to use it, since "Eagle eye" kindly gave us his permission.

The core technology works and was tested with a small example exe that "simulates" the hardware. To use this in practice, all we need to do is add all the variables that a specific hardware needs, IOW all the gauges and switches to the interface."