Condition of the property, they measure for square footage, look for any issues that might affect financing (ex: peeling paint is a problem for FHA loans). The majority of their work is research. What have other homes in the area sold for and how do they compare to the property they are appraising. They will make adjustments for differences in size, lot size, condition, amenities, etc.
Remember, an appraisal is an opinion of value and if you ordered 3 appraisals, you would more than likely get 3 different opinions.