How does intergrated GPU work?

It may not be as good as an external one. But at least you wont have to buy one

Only thing is the CPU you install may or will have to have integrated graphics to use it

if it doesnt then you wont get a signal

 
An APU is simply a processor that combines CPU and GPU elements into a single architecture. The first APU products being shipped by AMD and Intel do this without much fuss by adding graphics processing cores into the processor architecture and letting them share a cache with the CPU. While both AMD and Intel are using their own GPU architectures in their new processors, the basic concepts and reasons behind the decision to bring a GPU into the architecture remain the same....

....Intel’s recently released update to its processors also qualifies as an APU; Intel simply seems unwilling to use the definition. That’s understandable, since the company has been known as the world’s leading CPU maker for years.

apu1.jpg

http://www.makeuseof.com/tag/apu-technology-explained/

Intel's CPU's are also APU's nowadays.

 
an intergrated GPU is just that the Graphics processor has been taken from a video card and embedded into the CPU. the processor, not the entire graphics system, just the processor. this is important because the RAM the GPU now has to use is system RAM which has to be shared with the CPU. and the fact that DDR4 is slower than GDDR5 and you immediately hit the wall.
since the CPU and GPU have to share resources the iGPU will never be on par with a dedicated GPU card.
The card will have the Processor and a fast memory subsystem all to itself, add the fact that the GPU on a card can draw far more power than a CPU is capable of drawing and the iGPU is even more inferior.
you are a Graphics processor, and you have a dedicated office to yourself, you can optimize the work area to your optimal pace, versus sharing an office (not 2 desks and 2 of everything, 2 peeps 1 of everything) no matter how well you work together with the CPU you have been paired with you will be bumping into each other and slowing down the pace because you must share resources.
sloppy analogy but hopefully you can see the operational difference
 
Also bear in mind that for the PC market, APUs tend to have a much smaller amount of Cores/TMUs/ROPs vs most modern discrete graphics cards.

The larger the chip, the more expensive it is to manufacture.

iGPUs have their uses though. Light gaming, general 2D applications such as web browsing, streaming, Office applications etc.

I have used mine to run a second monitor/second desktop. Although most graphics cards can do this without issue as well of course.

In the 90's (approximately) there were PC's that had 'integrated graphics' but the GPU core was not included with the CPU. It was soldered onto the motherboard and would have 1 or 2 MB (say) of dedicated vram in separate modules (often expandable as well) and could share additional memory with the rest of the system. For example my old HP Vectra 486DX4.
 
The iGPU has no memory. it uses your RAM as its own, sharing the memory with the CPU. system memory DDR3 & DDR4, is much (@ half) slower than the GDDR5 that video cards use. GDDR5 can be arranged so that the memory bus is wider (I have seen up to 384-bit) than the memory bus that system memory uses (64-bit).
The wider the bus the more information per second transferred.

The iGPU has to use the system RAM, which is much slower than the memory on a video card, it has to use the slower memory on a narrower bus (further slowing memory performance) and finally it cannot draw enough power to really compare to a card.