One's eyes are just one organ in the system of organs that allows humans to see. The light first passes through the cornea then the lens. The lens and to a lesser extent, the cornea, refract the light, directing it to a point through the eye's vitreous fluid to land on the retina.
The retina reacts to light, triggering reactions that eventually lead to the light creating signals in the brain. These signals are not a direct representation of what the eye sees, like a bitmap image. They are compressed, into a much smaller signal, certain attributes of the image being more emphasized (and thus passing more of its information on) than other attributes. So one could say that the retina presents the first step in signal processing in human sight.
The signal goes through complex brain processes which won't be covered in detail here, but to simplify, the brain applies filters to the signal, trying to exclude unimportant information to preserve higher brain functions for important things. The brain typically is good at finding shapes in objects. Moving objects tend to get greater emphasis than stationary objects. Note how a predator typically stays very still and is not seen by its prey until it moves. The brain can be tricked as can be seen in various pictures designed to do just this.
The brain eventually associates the processed signals into known objects, such as one's computer monitor, letters, people, their faces, their nose, eyes, mouth.
Some interesting notes: Everyones eyes have at least one blind spot per eye. The optic nerve creates a blind spot on the retina that the brain processes out of the image before it reaches the brain. The page linked to above demonstrates how to find one's blind spot, quite cool IMO.
The clearest part of a human's vision is that that falls on the fovea. When one focuses on something, one is 'casting the image of that thing on one's fovea'.