[Hayes]

That picture shows it well.

Sometimes I find the system hard to visualize. The key is realizing that the VC is connected to the shaft and to the carrier, and the output shaft is splined to the side gears of the diff.
It helps me to think of the shaft being driven by the side gears, and the VC driven by the carrier--when the side gears and carrier are rotating at different rates, the VC applies the brakes (transfers torque) to the shaft/carrier.
Kind over simplified, but it all works out in my head...