They work on a similar idea to under gravel filters. Air is pumped into the base of a uplift/central tube. The air pulls water with it as it rises in the uplift tube. This water moving pulls the water through the foam and created the filter.
I've seen people run just foam filters and then I've seen them run them with just about every other type of filter. As for adding them to you canister intake, they would effectively become pre-filters and trap all the major dirt entering the canister.