I think it works roughly like this:

In a broad XML attachments work by addressing specific variables within the flight simulator program.  Your model gets created with parts tagged in a particular way, animated, so that when the model gets produced into flightsimulator, the makemdl (or fsds' conversion) reads the model part name, matches it with the xml description on the list, and embeds it into the MDL file structure. 

With the current FS9 SDK, then, that's why you have certain parts, such as in the VC, that respond to either click & drag or key commands, or respond to other control input movements, AND, as you move the cursor over these, the description floats out.

I believe that XML gauges work in a similar principle.