how the engine works?

Just like any other 4-stroke gasoline Otto cycle engine.

it is a 2.0l engine borrowed from toyota... but it works like any other 4cyl 16valve engine...

The trick Yamaha-developed cylinder head has separate low- and high-rpm cam lobes for variable valve lift and timing and it also rotates the intake cam (``degrees'' it, in tuner parlance) to further optimize performance. The result is very useable low- and mid-rpm performance for most everyday driving and a spectacularly enthusiastic high-end power surge. Taken right out of the Celica GT-S. Of course Lotus made major improvements to the ECU after they got their hands on the Toyota engine. http://www.cnorth.com.au/vvtli/vvtl_i.htm diagram ^^^

it is indeed the same engine that toyta use, which yes is designed and created from yamaha which in the toyotas is 190bhp, however lotus have made vast improvements to the performance. it is not a 2 litre engine however, its surprisingly only a 1.8, the same engine used in the newer mr2's (vvti) but without the high lift cams (vvtli). also it isnt from a celica gt-s, its from a variety of 3 different celica models, the "celica 190" which is the japanese imported version, the standard uk version known as the "celica t-sport" (this engine is most comonly known for the t-sport models, which they did in the corolla aswel) and then finally the limited edition "celica gt" which was a limited run to mark the end of the years of celica production :D:D