The link @cory posted is the description from the service manual. Just a repaste and I'll add some images and additional information.
Cylinder deactivation is accomplished by not allowing the intake and
exhaust valves to open on the selected cylinders by using special
valve lifters. The deactivation lifters contain spring loaded locking
pins that connect the internal pin housing of the lifter to the outer
housing. The pin housing contains the lifter plunger and pushrod seat
which interfaces with the pushrod. The outer housing contacts the
camshaft lobe through a roller. During V8 mode, the locking pins are
pushed outward by spring force, locking the pin housing and outer
housing together causing the lifter to function as a normal lifter.
When V4 mode is commanded ON, the locking pins are pushed inward with
engine oil pressure directed from the valve lifter oil manifold (VLOM)
assembly solenoids. When the lifter pin housing is unlocked from the
outer housing, the internal pin housing will remain stationary, while
the outer housing will move with the profile of the camshaft lobe,
which results in the valve remaining closed. One VLOM solenoid
controls both the intake and exhaust valves for each deactivating
cylinder. There are 2 distinct oil passages going to each cylinder
deactivation lifter bore, one for the hydraulic lash-adjusting feature
of the lifter, and one for controlling the locking pins used for
cylinder deactivation.
Although both intake and exhaust valve lifters are controlled by the
same solenoid in the VLOM, the intake and exhaust valves do not become
deactivated at the same time. Cylinder deactivation is timed so that
the cylinder is on an intake event. During an intake event, the intake
cam lobe is pushing the valve lifter upwards to open the intake valve
against the force of the valve spring. The force exerted by the valve
spring is acting on the side of the lifter locking pins, preventing
them from moving until the intake valve has closed. When the intake
valve lifter reaches the base circle of the camshaft lobe, the valve
spring force is reduced, allowing the locking pins to move,
deactivating the intake valve. However, when cylinder deactivation is
commanded ON, the exhaust valve for the deactivated cylinder is in the
closed position, allowing the locking pins on the valve lifter to move
immediately, and deactivate the exhaust valve.
By deactivating the exhaust valve first, this allows the capture of a
burnt air/fuel charge or exhaust gas charge in the combustion chamber.
The capture of exhaust gases in the combustion chamber will contribute
to a reduction in oil consumption, noise and vibration levels, and
exhaust emissions when operating in V4 mode. During the transition
from V8 to V4 mode, the fuel injectors will be turned OFF on the
deactivated cylinders. The ignition system secondary voltage or spark
is still present across the spark plug electrodes on the deactivated
cylinders. If all enabling conditions are met and maintained for
cylinder deactivation operation, the ECM calibrations will limit
cylinder deactivation to a cycle time of 10 minutes in V4 mode, and
then return to V8 mode for 1 minute.
Cylinder Deactivation (Active Fuel Management)
General Motors Active Fuel Management engine control
system has the ability, under certain light load driving conditions,
to provide maximum fuel economy by deactivating 4 of the engines 8
cylinders. The engine will normally operate on 8 cylinders in V8 mode
during starting, idling, and medium or heavy throttle conditions. When
commanded ON, the engine control module (ECM) will direct the active
fuel management system and deactivate cylinders 1 and 7 on the left
bank and cylinders 4 and 6 on the right bank, forcing V4 mode. Refer
to Lubrication Description and Cylinder Deactivation (Active Fuel
Management) System Description.
Valve Lifter Oil Manifold Assembly
The valve lifter oil manifold assembly is bolted to the top of the
engine block beneath the intake manifold assembly. The oil manifold
consists of 4 electrically operated and normally-closed solenoids.
Each solenoid directs the flow of pressurized engine oil to the active
fuel management intake and exhaust valve lifters. The active fuel
management oil pressure relief valve, located in the oil pan,
regulates engine oil pressure to the lubrication system and the oil
manifold.
When enabling conditions are met for active fuel management operation,
the ECM will ground each solenoid control circuit in firing order
sequence, allowing current to flow through the solenoid windings. With
the windings energized, the solenoid valves open and direct
pressurized engine oil through the valve lifter oil manifold into 8
vertical passages in the engine block lifter valley. The 8 vertical
passages, 2 per cylinder, direct pressurized oil to the valve lifter
bores of the cylinders to be deactivated. When vehicle operating
conditions require a return to V8 mode, the ECM will turn OFF the
ground circuit for the solenoids, allowing the solenoid valves to
close. When the solenoid valves are closed, remaining oil pressure is
exhausted through the bleed passages of the valve lifter oil manifold
into the engine block lifter valley. The housing of the oil manifold
incorporates several oil bleed passages that continually purge trapped
air from the manifold and engine block.
To help control contamination within the active fuel management
hydraulic system, a small replaceable oil filter is located in the
valve lifter oil manifold oil inlet passage. The oil pressure sensor
monitors engine oil pressure and provides information to the ECM.
Active Fuel Management Valve Lifters
When operating in V8 mode, the active fuel management valve lifters
function similar to the non-active fuel management valve lifters. The
active fuel management oil manifold solenoids are in the closed
position, with no pressurized oil directed to the valve lifters. The
pushrod travels upward and downward to actuate the rocker arm and
valve. The spring loaded locking pins of the lifter are extended
outward and mechanically lock the pin housing to the outer body of the
valve lifter.
When the active fuel management system is commanded ON, the ECM will
direct the solenoids of the oil manifold to open and direct
pressurized oil to the valve lifters. Oil travels through the valve
lifter oil manifold and engine block oil galleries and enters the
inlet port of the valve lifter.
When operating in V4 mode, pressurized oil forces the locking pins
inward. The pushrod remains in a constant position and does not travel
upward and downward. The outer body of the lifter moves upward and
downward independently from the pin housing. The valve lifter spring
retains tension on the valve train components to eliminate valve train
noise.
When the active fuel management system is commanded OFF, the ECM
directs the solenoids of the oil manifold to close, stopping the flow
of pressurized oil to the valve lifters. The oil pressure within the
lifter will decrease and the locking pins will move outward to
mechanically lock the pin housing and outer body.
Engine Block
The active fuel management engine block incorporates additional
features to support active fuel management system operation. Engine
oil pressure is routed to the valve lifter oil manifold assembly from
an oil gallery in the rear of the cylinder block. Cylinders 1, 4, 6,
and 7 each have 2 vertical, cast-in-block oil passages . The vertical
oil passages permit oil flow from the manifold assembly to the valve
lifter bores.