How do Membrane Bioreactors(MBR's) operate and what is the fundamental difference between an MBR and a conventional Activated Sludge Reactor(Aeration Tank)?
How is secondary clarification obviated in a process with an MBR?

MBR technology combines the activated sludge "bioreaction" portion of the water treatment process with the solid removal "clarification" portion. In your typical bioreactor WWTP, you'll have a sludge activation process where the "good bacteria" are encouraged to grow and eat the "bad bacteria" as well as nitrogen, etc (called denitrification process). The resultant effluent of this process is then piped to a "clarifier" which is essentially a rotating mechanism in a big tank where the solids in the waste water are separated from the water itself. In MBR technology, the solids are filtered within the bioreaction phase. General Electric provides such technology - if you run a simple Google search you can find some information on it. Typically, MBR plants have a smaller footprint than conventional plants, though their initial cost is higher.