Being technically challenged. The way I have seen it explained is that on an 8 gear hub 1 & 8 are the same range as on a 27 speed dérailleur and the other 6 are spaced out in between giving a lot more range. Now, not sure if this is totally correct.
The other advantage is if you have to come to a stop on a hill with a hub gear you can select whatever gear you want while stationery, that has to be a good thing! Plus the reliability and lack of maintenance factor.
I dont know how they work though.........