when you are on the pill, you artificially elevate certain levels of hormones while suppressing others. During a normal cycle (days 1 thru 14) your levels of estrogen begin to rise. They spike, triggering the release of another hormone called luteinizing hormone. This is the signal that causes ovulation.

Your pill contains a synthetic progesterone. Its role is to suppress estrogen's growth effects -- endometrium thickening and ovulation. when you take your pills, you manage to squelch the events on days 14 and 15 (ovulation and what not). Then you finish out your pack and your hormone levels fall. Think of it this was. You're dirving on a freeway, and there's an exit for ovulation, but when you're on the pill, you drive past that exit. it's kinda like that.

Progesterone keeps your uterus from shedding its lining. When you take placebos, progesterone falls and your start your period.