IS is a mechanical thingy inside the lens that compensates for blur caused by holding a camera unsteadily (called Camera Shake), which is apt to happen with this lens because it weighs 3.2 pounds. The further you zoom, the bigger the effect of camera shake. It just seems to know where you originally focused, and gently jiggles the lens internally to hold it steady. I have no idea how it works, but I picture the mechanism to behave like a chicken head - if you hold a (live) chicken and move it around - left right, up down, forward backward, it will keep its head in the same spatial position relative to the room. There is a video demonstrating this, and it will all become clear: http://www.wikio.com/video/624234
That IS feature makes this lens a grand total of $4030.47 new from Amazon (I just checked), compared to $1199.99 without the IS. Wow. I had no idea the lens cost that much when I rented it for $35 for the weekend. Is this right? Other places sell it for closer to $2000. Anyways, it costs and weighs a LOT.
It takes beautiful photos. The above photo was taken from some distance away - if you look at the wide angle pic below, you'll see there's no way I could've been anywhere near the bride without being completely rude and standing on someone's lap, or running up and down the aisle. It is fun to use. I feel like a spy, getting up close shots without the subject knowing. For sure, this is the lens that high end private detectives use.