The filters used have incredibly small pores in them, about 1.4 microns, though most producers are keeping their exact techniques secret.
The process appears to be common for most producers, though. The milk is separated first from the cream to make skim milk. The skim milk is then forced through the filters. About 95% of the skim milk comes through filtered. The other 5% of the skim milk is used to carry away the filtered-out bacteria; this can be pasteurized to be used in other dairy products.
The filtered skim milk, in North America, is then pasteurized as is required by law. But, the filtration means the producer can pasteurize at a temperature closer to the legal minimum, rather than higher as they often do for the sake of caution.
The cream that was removed is then pasteurized, and added back to the skim milk to make up the desired fat content for that product.
Micro-Filtration of milk is not approved in Canada or America as a substitute for pasteurization, because while it may filter out bacteria, health scientists are still questioning what effect it would have on any viruses in the milk.
In some European countries, you can get milk that has been micro-filtered, but not pasteurised.
The Micro-Filtration process was used in the 1980s in Europe for milk for cheese.
In the mid-1990s, the Union of Milk Cooperatives in France launched the Marguerite line of micro-filtered milk.
In North America, the process was first used for drinking milk in Ontario, Canada in January 1995, for Lactantia Purfiltre homogenized, 2%, 1% and skim milk (made by Ault Foods) 
 Dairy Foods Magazine. Filter out bacteria: ceramic microfiltration systems remove organisms. March 1996.
Fresher for long. New Scientist Magazine. 12 February 2005. Issue 2486.