The Fernandes Sustainer system is a unique system used in Fernandes guitars to create infinite sustain without standing directly in front of a cranked amplifier.
The system consists of 3 parts. The sustainer pickup, the bridge pickup, and the sustainer circuit board. Basically, you play a note. The bridge pickup amplifies the sound like normal, but the sustainer pickup, rather than actually picking up sound, projects a magnetic pulse. Because electric guitar strings are magnetic, this causes them to vibrate, which means there is still vibration for the regular pickup to work with. Continually hitting the string with magnetic pulses means it keeps vibrating, which means the regular pick up continually gets signal. So -- infinite sustain.
Two different modes are available. One mode simply sustains whatever note is picked. This is very similar to the action of various compressor/sustainer pedals available from companies such as Boss and Digitech. The second, or harmonic, mode, alters the signal via the sustainer circuit board. This is done in a way that creates harmonics. The goal is to reproduce the feedback and sustain from standing in front of an amplifier, but with more control and at lower volumes.
Some well-known guitarists that use the system: Steve Vai, The Edge, Kerry King, Robert Fripp, and Danny Lohner.
Note that the Fernandes sustainer is a different beast than a pedal sustainer.
Pedal sustainers are usually called compressor/sustainers. Compressor/Sustainer pedals do two things: compress your signal to even it out, and cause sustain to. . . well, force notes to ring out for a very, very long time.
Compressing your signal adds volume to quiet notes and cuts volume from loud notes. This makes your playing sound very even. If you hit a note a little too softly, the compressor will bring it back up and it will ring loudly, just as if you hit the note well. If you inadvertantly pound out a couple notes, the compressor will bring them back down to the same level as the previous notes that you played perfectly.
The sustain is actually kind of a desirable side effect. Because the compressor/sustainer is bring up the volume of notes, those notes don't really die out. While a note would normally fade away after you play it, with a compressor/sustainer adds more volume to those notes the lower they get. It's just trying to keep everything at the same level, but many of these pedals can give you infinite sustain at high compression settings.
There is another guitar-mounted sustainer, called the Sustainiac. I know little about it, but I am under the impression that it is just a guitar mounted compressor/sustainer, and does not have the same effect as the harmonic mode of the Fernandes version.