It can also be a mix of apache's mod_rewrite, and using the HTTP REQUEST_URI, and PATH_INFO variables that are set during web requests.

mod_rewrite isn't necessary if you have a default handler (controller) that services all requests. You can write a controller that starts going up the REQUEST_URI path tree and checking to see if that's a valid PHP script/whatever, and then setting its arguments as the remaining arguments. Ex: /marketplace/itemdetail/50022 would check /marketplace/, then /marketplace/itemdetail/ for a valid index.php file, and then pass in the remaining parts (50022 in this case).

Take a look at this for more HTTP environment variables:
PHP: $_SERVER - Manual