Johan Björnfot at EPiServer explains some of the details in this post.
Excerpt:
"In previous versions of CMS was pages (PageData) the only content type that the content repository (traditionally DataFactory) handled. In CMS7 this has changed so now content repository (IContentRepository) handles IContent instances. This means that the requirement for a .NET type to be possible to save/load from content repository is that it implements the interface EPiServer.Core.IContent.
There are some implementations of IContent built into CMS like PageData and ContentFolder (used to group shared block instances) and it is also possible to register custom IContent implementations.If you look at BlockData though you will notice that it doesn’t implement IContent, how is then shared block instances handled?
The answer is that during runtime when a shared block instance is created (e.g. through a call to IContentRepository.GetDefault where T is a type inheriting from BlockData) the CMS will create a new .NET type inheriting T using a technic called mixin where the new generated subclass will implement some extra interfaces (including IContent)."