See the Profile for more details, but it's pretty simple: mods post a prompt, members try writing something inspired by said prompt, post the resulting ficlet, and profit! (Or not, of course; this is Blake's 7. It may not end well.) Once every twelve weeks or so, the community has an amnesty week to allow people to catch up.
At the moment, the community is on permanent amnesty, which means we aren't posting new prompts, but we aten't dead either, so please feel free to work your way back through any previous prompts and post the results to the comm.
We will see if there is any current interest in reviving the community, now that it has a new home. If so, we will be very happy to do so!
(If you have any concerns about imported material, one helpful option (if you have a Dreamwidth account) is to claim your Open ID. It's very simple, and once done, gives you the same level of control over your imported comments and posts as with the originals.)