Kokomolock put up a good video of a Medeco cutaway, its not an animation but its a good start. http://www.youtube.com/watch?v=gOdOGKux2CE
Basically, think of a normal 5 pin tumbler lock. There are springs pushing top pins down into the plug, and since those metal pins are in the way, the plug cant turn, right? the way a key works is by lifting the key pins up high enough to push all the key pins out of the plug so they're not blocking it from turning left or right. The second that occurs we have created a shear line.
Now, lock manufacturers said, shoot, people who practice enough, can still pick our locks, no matter how nicely we make them and how good the tolerances, and how difficult it is to determine the binding order, people can still pick them. So they started introducing more stuff inside the lock to mess with pickers.
Enter the sidebar. I'm gonna stick with using Medeco as an example because it keeps the parts to a minimum, but you can use Schlage Primus, ASSA Twin, ASSA Desmo, BiLock, Abloy and others as examples. If you're looking at the front of a medeco, on the right side of the plug, at 3 o'clock there is a > triangle shaped cutout in the lock body. in the plug there's a groove milled out on the side and a sidebar that sits in there and has a couple springs that push it out of the plug and into that > triangle shaped cutout in the lock body. oh oh, guess what, now we have another piece of metal in the way blocking the plug from turning. So even if we lift all the pins up to the correct height and create a shear line, we still have this big old sidebar in the way blocking our rotation.
So now you're thinking, hey if I just start to turn the lock, the > triangle shape of that groove should make it push the sidebar back into the plug, but the sidebar has these fingers on it that face the key pins in the lock and unless the pins are rotated so their slots/gates face the sidebar fingers, the two parts cant mesh together, and the sidebar is just going to end up pressing against the pins, and not have anywhere to go so it will still be blocking the plug from rotating. If however you insert the correct key, or pick the lock, and the pins are raised to create the shear line, and the key or your picks also rotate the pins to the correct angle so the slot on the side of each pin is facing towards the fingers on the sidebar, then when you turn the lock the sidebar has some where to go and that creates the second shear line and the plug is finally allowed to turn all the way.
Now, a picture is worth a thousand words, so here's a bunch of Medeco pins of different heights, and you can see the grooves cut in them for the sidebar fingers to go into, there are also false grooves to try and stop pickers.
This old Medeco literature compares a normal lock to the extra parts inside a Medeco lock.
Very useful drawing: http://modernlock.com/medeco.jpg
here are some photos our friend jkthecjer took of his plug and the sidebar removed:
Perhaps the best photo to explain this is this one: Notice all pins are to the shear line, and all pins are rotated so their slots/grooves are facings towards the sidebar which you can see halfway sticking out of the plug at the top of the photo. As you rotate the plug and rotate out of the > triangle cut out in the lock body where the sidebar normally lives, the sidebar has to go somewhere so it compresses into the plug and it's fingers mate with with grooves in the pins. (The red arrows are basically the sidebar and it's fingers and the direction it moves in.)
MitchCapper also has some really good photos of a cutaway he made:
Here's a view from the top, shear line for the pins already created, and the sidebar's fingers already mated with the key pins (grooves painted purple so you can see them better, sidebar itself blocked by the lockbody, so you cannot see it in this photo, but check out the link below for more)
As well as his gallery of the process of making a cutaway: http://mitchcapper.com/general/18-medeco-biaxial-mortise-my-cutaway/
Hope that helps you understand sidebar locks a little better, please note this is just one design, there are many variations, some that use pin shearline and sidebar shearline, some that only use sidebar shearline, or some that use 2 sidebars.
PS. it's pronounced Medeco, Meh-deh-co not Medco