lateral inhibition

While studying the section in the text on optical illusions, I noticed that the authors only briefly mention lateral inhibition (page 111). They note that lateral inhibition explains illusory contours, but they do not actually explain what that means. I thought this concept would be worth a closer look for some of you. Lateral inhibition is an interesting neural process - I studied it a lot for a course in sensation in perception, so I thought some of you might be interested.

Here is a link that gives a pretty good explanation:
http://serendip.brynmawr.edu/bb/latinhib.html