A:  Water is brought to a boil (using distilled water is best).
B.  Steam travel throught tube to mother flask and continues down to the bottom of the flask through a glass tube.
C:  Steam fills the mother flask and releases oils in the lavender into a vapor state.  Oil is carried up and out with the steam into the condensation tube D.
D:  The condensation tube is surrounded by a cold water jacket which cools the steam causing condensation of the steam and oil vapor into water and oil.
E.  The drops of water and oil collect in the flask.  The lavender oil separates from the water and rises to the top.

The lavender oil is taken off into another container where it "ages" for several months to get rid of extraneous plant esters and water which are caught in the oil.

The water porduced by the distilling process is a theraputic by-product called hydrosol.  For external use only.

The still above holds 5 gallons of lavender buds in the mother flask.  This yields from 1/3 cup to 1/2 of lavender oil.

A homemade still can be easily made from rudimentary materials.  Look online for information.  It is fun to do.