The active ingredient in Alli is called Orlistat, and works by preventing some enzymes in the stomach from breaking down dietary fats into a form that can be absorbed into the bloodstream. Alli would be expected to prevent around 25% of your dietary fat intake from being absorbed ? the unabsorbed fat is excreted in the stools. It works only within the digestive system; it's not a stimulant, or an appetite suppressant.
Alli is taken just before, with, or within an hour of each main meal. If a meal is missed, or contains no fat, there's no need to take one.
The most important thing to realise about Alli is that it's not a miraculous weight loss solution. It still needs work and willpower on your behalf: you will need to commit to change your diet, reduce your portion sizes, undertake more exercise, and understand that you'll need to set a realistic weight loss target of around 1-2 lb a week, (5-10% of your body weight in total) to get the best out of it.