Read this answer for details on how Bittorrent works - it will also tell how you seeds and peers act.
The difference between Bittorrent and things like Napster include:
The central server in Napster-like P2P networks serves as a place where peers can meet and exchange directories of files. With Bittorrent, the "tracker" is still such a place where peers can meet, but they do not exchange directories of files. They only exchange the hashes of an entire file and the hashes of its pieces, which servers to indentify the set of files in that current torrent, and this information comes from the .torrent file, which is NOT stored on the "tracker proper" in any way.
Most Napster-like P2P programs only support a direct stream transfer from peers. Bittorrent is designed to split the file into pieces so each peer in the swarm can be constantly trading them, making it much more robust and fast.
A "torrent server" is only hosting .torrent files which DO NOT CONTAIN ANY FILE CONTENTS. The torrent file contains ONLY the URL of the tracker, and SHA-1 of the entire fiie and each of its pieces. Without a peer that already has the whole file, no one else in the swarm is getting the file. All the content from a Bittorrent swarm that you get as a member of that swarm is coming from others in the swarm, not the tracker itself.