Crate training uses the theory that dogs are den animals in nature and prefer a small closed in area to sleep in. Dogs also will not mess where they sleep.
Crate training uses a crate large enough for your dog to turn around in (too big and it won't be effective). While housebreaking, the pup should go in whenever he cannot be closely watched. As I mentioned they will tend not to mess where they sleep, so it prevents accidents. You also have to realize that at a certain point, the dog will just need to go and go anyway, so taking the pup out at regular intervals is also important.
Crates also keep dogs out of mischief when they are not supervised, whether you are out or making supper. Dogs can get into a lot of dangerous stuff, things they should eat or chew on, while you are out. If they are safely in the crate, they cannot do damage to your house or harm to themselves.
Pups usually cry at first when using the crate, but will come to like it. Many will go in there during the day if the door is left open. It is also great when you have a lot of people over, the dog has their own spot to go to if overwhelmed.
There are a few important rules to remember when using a crate, number one is it is NOT used for punishment. Ever. If the dog gets into something, you can put him in the crate, but you do not scold or use the crate command if the dog is in trouble.
Second, when training at first, never remove the pup when it is crying. It will teach them crying= getting out and will encourage the behavior.
There are tons of links on the net, just google crate training.