[rcthompson]

You're correct that it's taking multiple photos with the same settings, but the trick is that it can choose different settings than it would have for a single photo. So instead of a single medium-ISO shot that loses all shadow detail but minimizes noise, it could take multiple high-ISO shots to capture the shadow detail and then average them to minimize noise.

So if you think of your dynamic range as being limited by the noise floor and the overexposure ceiling, this technique lowers the noise floor while keeping the ceiling right where it is, giving you a better effective dynamic range. ISO bracketing extends both the floor and ceiling by a much larger margin, of course, but its has issues that complicate its use in automated HDR shots, as described in the article.