It happens when you hear only what you want to hear. It includes clarifying the speaker's message and then showing mutual understanding. Active listening doesn't come naturally to most people. It's a learned activity that may seem awkward and slow at first. But with practice, it will become easier.
Content includes the words, facts, figures, ideas and logic a speaker conveys.
If you don't understand the content of what's being communicated, ask the speaker for clarification. Listen to the intent. This is much easier if you know the speaker. You try to balance the content, nonverbal communication, the speaker's background and whatever bias or position he or she may have about the subject. For example, say one of your co-workers is quick to endorse a controversial new plan unveiled by your department head.