Try to think of it this way ... Captcha Sniper emulates the decpatcher web site ... so in essence it is a web server listening for incoming calls on port 80 .. so it can run on any machine that your bot/tool(amr,scrapebox,etc) has access to.
The bot/tool(amr,scrapebox,etc) can run from a different machine and via a simple hosts file redirect, it can point calls that are being made to decaptcher by the bot/tool(amr,scrapebox,etc) to the machine running Captcha Sniper.
All the hosts file does is simply rout a domain to an ip address.
Hope that helps.
Thanks for the explanation it makes total sense since you've explained it that way. Just not sure how to set it up. I know how to edit hosts files and all that pretty easy. Just not sure how to actually do it.