In closed loop systems, liquid (usually with some sort of anti freezing/anti boiling agent mixed in) circulates through pipes buried beneath the earth's surface. During the winter, when the goal is warming a house, the fluid absorbs heat from the earth and carries back to the building. This very hot liquid can be effectively used to heat a home, and also quite obviously becomes a free-flowing source of usable hot water. During the summer, the system is designed to actually draw heat out of the building, and either use it to heat water for household use or deliver it back into the ground.
Open looped systems are quite similar, except that the water supply within the pipes is continually refreshed.
The bulk of geothermal heat pump (Ground source heat pumps) systems are the pipes that are buried far underground, so what is needed in your home is a unit likely no bigger than your current hot water heater and furnace. If you currently use oil, you may be able to get rid of or at least substantially downsize the size of your oil tank.
If you already have a forced air oil or gas-fed furnace system it may be easy for you to convert to what is called a "dual system". In this case you would choose which heating and cooling system would be primary at any particular time - most likely the geothermal system - and the other system will only work when needed, such as during an extremely cold spell in the winter
Ground source heat pumps are quiet and safe. There are no exposed parts, fans, storage tanks, etc. that can hurt kids or pets. Nothing is burned so there is no flame. The heating source is the earth so there is nothing to wear out. They are also quiet because the earth is doing the work of the motors in your current furnace.
The initial cost for ground source heat pumps is greater than that of a conventional oil or gas system. However, that initial cost is often made up in three to six years depending on the cost of fuel and the temperature in your area. The greatest benefit of these systems is that you no longer have to use oil or gas at all.
note:refer videos for more information on systems
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