Thunderbolt uses the Mini DisplayPort connector pioneered by Apple for physical connections; future versions will presumably incorporate optical connections, but the current generation released in Apple's MacBook Pros is purely electrical. Apple was not able to clarify to us how optical cables could be used with the ports on the new MacBook Pros, but an Intel press conference scheduled for this afternoon promised to offer more technical details.
Because each Thunderbolt device will include a tiny Intel-made controller, similar to FireWire, multiple Thunderbolt devices can be daisy-chained to a single port and can communicate directly peer-to-peer. It doesn't require hubs like USB does, nor does it depend on the CPU to initiate and handle device communication. Also like FireWire, Thunderbolt ports can supply power to connected devices—up to 10W total per port. Furthermore, powered devices in the chain can pass 10W of power further down the chain if needed.
Thunderbolt supports both DisplayPort and PCI Express protocols over its 10Gbps transport layer. A major benefit of this design is that Thunderbolt devices can leverage native OS drivers for PCI Express and DisplayPort for compatibility—no additional drivers are needed. Existing Mini DisplayPort-equipped monitors are already compatible and can be plugged in directly, and Mini DisplayPort adapters for VGA, DVI, or HDMI will also work. Intel said that adapters can be made using a Thunderbolt controller and common PCI bridges to adapt existing FireWire, USB, eSATA, and even Ethernet connectors.
Intel's controllers handle all the necessary protocol switching between PCI Express and DisplayPort, which enables simultaneous transmission of data via both protocols over the same cable. The controllers are also optimized for extremely low-latency communication with quality-of-service support, which is critical for handling pro video and audio applications. Connected devices can be clock-synchronized to within 8 nanoseconds.