A blank round is extremely similar to a live one, but without the little bit of lead on the end that makes it dangerous.
When firing blanks, the results are seemingly very similar to those of firing live. This is because the construction of the round differs little.
The Blank Round
------------------------
M
|M|
/ x \
|xxx|
|xxx|
|xxx|
/_#_\
x represents the charge (ie gunpowder)
M is a piece of wax to seal the end
# is the detonating cap
When the firing pin comes forwards and strikes the rear of the round, it comes into contact with the detonating cap. This ignites the powder, causing the 'bang' and muzzle flash which are characteristic of blackpowder weapons. This explosion expands at high speed, carrying the wax padding with it. This disintegrates quickly, but if fired at a target from within 30 yards it can be felt, and from within 10 can be fatal.
The Live Round
----------------------
^
^^^
^^^
/ x \
|xxx|
|xxx|
|xxx|
/_#_\
x represents the charge (ie gunpowder)
^ is the bullet, a lead projectile
# is the detonating cap
On firing the live round, a similar process occurs to that of firing a blank. The gunpowder is ignited, carrying the lead bullet with it. This is ejected from the muzzle at a velocity of several hundred meters per second. With both types of round, re-cocking the weapon ejects the empty case and loads the next round.