They can be as simple as a frag tank attached to your display and sump. Most pests cannot make it from tank to tank, so this is pretty good but probably not 100% for the super-anal folks. This is what I do now - observe and dip between the tanks. It is not worth my time to do anything else.
Having a completely different system is the ultimate. Some people change their display water into the QT tank, but I would never do that - you can get backwards contamination.
I keep the same lights and parameters as in my reef. If you keep the frags/corals in there for long, you will need a way to replenish the major and minor elements. I keep a small fish and some shrimp in there to have some nutrients - damsel, cherub angel, few emerald crabs and four peppermints are my current residents. They get flake every few days. I do keep some rock and sand in there for more stability.
My process: I currently only get stuff from people that I trust. However, I don't trust anybody... I remove stuff from the plugs and get new plugs ready. I dip in Coral Rx and observe. If I see something funny, then bayer, but rarely. Coral QT for a while until I am seeing good growth, no pests (AEFW bites for me)... this can be anywhere from two weeks to a few months. Then, when I am ready, I remove them from the plugs again, CoralRx dip and put them in the display. In the case that I take something from the display to the coral tank, then I dip there too.