I'm interested because I have waaay too many books on my shelf and I would swap most on my list for postage, but how does it work?  Do people send you stamps or money in the post (uncomfortable with that idea)?

It really is between you and whoever wants your book to sort out any arrangements about the books you'd like to give away.

The majority of people tend to list the books they are offering in this section, and then using the private message feature arrange for stamps equal to the postage costs to be sent to your address. You would then just send on the book.

I know some people have sent cheques, cash and have even paid via Paypal before.

Some even pay for their own postage online using Royal Mail and I think the link can then be emailed to you, you then just need to print it off and stick it on your parcel - not sure of the details of this as I can't use online postage!

Or if they use online postage, they can pay for the postage and address the label to themselves, then email it to you so you just have to stick it on the parcel to send off to them.  But obviously you have to be able to tell them how much it weighs and whether it's a packet or large letter, so they can get the costs right on this.  I've done it this way once, but more often people have sent me stamps which has been great too. 

If you're worried about making sure people send you the postage so you're not left out of pocket, it's perfectly acceptable to say you'll only send the book once you've received the payment - just state that upfront, so people know what the deal is.