Actually, it's just a small batch file. When you run it, it opens the .m3u playlist in Vim (a text editor) which then turns the playlist file into an input file for the command-line version of Nero. Then Nero burns a CD image with the tracks, which gets mounted in Daemon Tools.
Admittedly, I downloaded and tried M3U2SB for the first time yesterday, and it does a better job than DaemonMD does, but there's no harm in trying to do things yourself!