@gollum,
The basic operating physics behind any AC comes from the fact that when you compress something (in this case a gas), it acquires the energy of compression and gets hotter. And when you decompress something it releases that energy and gets cooler.
So in an overly simplistic sense, what you do in an AC is to compress the gas in an outdoor unit and blow air across it to cool it off. That's what the radiator chambers/mesh are for in the outdoor unit. Then you pump the normalized compressed gas back to the indoor unit where you release the pressure and then blow internal air across the cooled indoor radiator, producing cold air. Then you cycle the normalized gas back to the outdoor unit and the whole process loops.
The same basic process is used for refrigerators as well, just on a smaller scale.
Window AC units do the same thing, just in a single unit which has an inside side, and an outside side.
And Ductless AC units just do the same thing except that they blow cold air directly into the room rather than blowing the cold air into a duct system in the house.