A bar serving a cool beer from the tap (faucet) has, often in the cellar, underneath the bar, or in another room, a set up that looks a bit like this. Sometimes the entire setup fits within what's called a kegerator, or parts of it are cooled (not frozen) to make sure the beer you're being served is at an optimal temperature.

To set up a draught beer system there are a couple of variables to keep in mind: The distance your beer has to travel from the keg to the tap, the type of beer you're serving, the beer's ideal serving temperature and what type of coupler the keg it will be delivered in is fitted with.

Depending on local laws beer lines can be made from stainles steel, copper or food-grade PVC. Either way, these need to be cleaned regularly.

Couplers allow gas to enter the keg while, at the same time, allow beer to flow up and out of it. The spear, inside the keg, runs down to the bottom as far as it can, in order to enable as much beer as possible to flow out of the keg.

Many beers (such as pilsners) require carbonation. That is why CO2 is often used. Other beers, such as dry stouts, use nitrogen instead. Nitrogen, however, is used under higher pressures. Therefor a nitrogenized beer setup requires nitrogen-specific regulators and possibly other hardware.

In the UK beer engines and flat, "real" ales are more popular. Here the kegs are called casks and no gasses are used. Instead, the ale casks are aired and the warm beer is pumped, manually, using the beer engine. How, exactly, is a great topic for another video.

For more information check the sources below.

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Sources:
   • How Draft Beer Systems Work  
https://en.wikipedia.org/wiki/Draught...
https://nl.wikipedia.org/wiki/Biertap
https://nl.wikipedia.org/wiki/Eenmali...
https://de.wikipedia.org/wiki/Keg
http://www.dummies.com/food-drink/dri...
https://learn.kegerator.com/regulators/