Open loop traditionally, the ECM looks up values in a table that are set (long term trims still apply in most cases I think). Then that value is changed by multipliers like intake air temp, coolant temp, cold start, map, EGR, etc.
In closed loop, the ECM looks up values for a target AFR, then uses feedback from the O2's to match the desired AFR, a la short term trims. While still using the same multipliers from before but I think they have less effect than in open loop.
Obviously this can very from engine to engine and manuf. to manuf., but this basically how it works. I dont know anything on Suby's but I do know in depth on the LT1 (my car) and and most of LSX stuff.
I'm sure someone who does a bunch of tuning can tell you more (Bill Wright, RUTAN TA).
EDIT: I see RUTAN TA posted while I was typing.