The GLM library is a header-only library. All of the implementation is included within the header files. It doesn't require separate compilation and you don't need to link your program to it. Just placing the header files in your include path is all that's required!
The previous example first creates vec4 (a four-component vector), which represents a position. Then, it creates a 4 x 4 view matrix by using the glm::lookAt function. This works in a similar fashion to the old gluLookAt function. Here, we set the camera's location at (0, 0, 5), looking toward the origin, with the up direction in the direction of the positive y axis. We then go on to create the model matrix by first storing the identity matrix in the model variable (via the single-argument constructor), and multiplying it by a rotation matrix using the glm::rotate function.
The multiplication here is implicitly done by the glm::rotate function. It multiplies its first parameter by the rotation matrix (on the right) that is generated by the function. The second parameter is the angle of rotation (in degrees), and the third parameter is the axis of rotation. Since before this statement, model is the identity matrix, the net result is that model becomes a rotation matrix of 90 degrees around the y axis.
Finally, we create our model-view matrix (mv) by multiplying the view and model variables, and then use the combined matrix to transform the position. Note that the multiplication operator has been overloaded to behave in the expected way.
The order is important here. Typically, the model matrix represents a transformation from object space to world space, and the view matrix is a transformation from world space to camera space. So to get a single matrix that transforms from object space to camera space, we want the model matrix to apply first. Therefore, the model matrix is multiplied on the right-hand side of the view matrix.