I don't have AlexReader at hand, so I can't to say exactly how it work, BUT... there's Alex firmware released which anyone can download and examine. So I suggest EE tech to do so Also I'd like to suggest them to download open sourced project OPENINK -- which contains absolutly best firmware and drivers for use with e-ink displays.
But in genereal, as I understand instead of converting docs before sending them to e-ink sofware (which after this send renderend picture to e-ink) like EE do, Alex send content from virtual frameboofer directly to e-ink, you can think of it as a virtual "print screen button" or better like "virtual printer".