I did a quick telephone study section this morning, where I participated in reviewing 3 proposals for the National Institute of Health. The way science is funded is that scientists (from universities, centers, etc) write grant proposals and send them to the NIH. NIH has study sections that review these proposals and assign a priority score, which basically ranks the proposals. There are thousands of reviewers each study section, as each proposal gets read by at least 3 people. After the proposals are ranked the individual institutions within NIH (e.g. NIMH-National Institute of Mental Health, NCI- National Cancer Institute, NIA - National Institute on Aging) looks at the appropriate proposals and funds them based on the monies given to them by congress.
Reviewing for the NIH is an awesome responsibility and I am always honored to be asked.
You can search the CRISP database for all of NIH current and past proposals. Don't bother looking me up (yet), I haven't got my proposal funded (yet).