The conversion process includes making the proper output settings in the desktop application and then printing PostScript data into a folder watched by an application called Acrobat Distiller. The Distiller essentially RIPs the PostScript and outputs pdf data according to your settings. The settings one makes in Distiller include embedding fonts and declaring the desired resolution for scanned images. This conversion results in one compact file that is can be sent to prepress. The resulting pdf file can be displayed, annotated and printed using Acrobat Exchange.
Output can include proofing to a color device or separating the output to film.
There are some concerns over the step of creating the pdf. If your customer does it you should make sure they know how to do it right. This could be an excellent way to simplify your work and to handle jobs from non-standard platforms and applications. Adobe is hanging much of their future on pdf. Adobe is also pitching pdf as a format for distribute and print strategies and for richly formatted web pages.