Google Sitelinks are little sub-listings that sometimes appear under the first listing on the first page in Google search results. See the five links (enlarge pic on the right side) that are indented under the main listing? Those are Google Sitelinks.
Google has a help document named How do you compile the list of links shown below some search results? that explains a bit more on how they work.
Sitelinks created automatically by an algorithm. Google says they "analyze the link structure of your site to find shortcuts."
Social Patterns once tried to analyze what generates the exact links that come up, back before the feature was formally named. I suspect they are now based on the link popularity of your internal pages, mixed with how many internal links you have pointing to your inner pages added with the popularity from external links.