Tunneling is a method of transmission over networks based on differing protocols. In tunneling, a packet based on one protocol is wrapped, or encapsulated, in a second packet based on whatever differing protocol is needed in order for it to travel over an intermediary network. In effect, the second wrapper "insulates" the original packet and creates the illusion of a tunnel through which the wrapped packet travels across the intermediary network. For example, TCP is wrapped in an SSL-Tunnel.
In real-life terms, tunneling is comparable to "encapsulating" a present (the original packet) in a box (the secondary wrapper) for delivery through the postal system.
When a tunnel is activated in SSL-Explorer, a tunnel is created between the source port on your system and port 443 through SSL-Explorer, from there SSL-Explorer connects to the destination port using a secure tunnel.