They are passive right? And they thus do take power?
Do they eliminate certain frequancies that the speakers arn't able to reproduce or do they just "direct traffic" and send frequancies to the appropriate speaker without cutting anything out?
They cut out frequencies. Passive crossovers use inductors and capacitors to provide a gradual impedance rise, the driver gets less power as the speaker moves farther out of its intended range. There is a loss of power when using passives, sometimes a rather large loss of power when referring to high order networks. This is one of the pushes to use active crossovers.