Induction lamps are in principle based around the same theory as allows normal fluorescent lamps to operate.  This is that when a gas is ionised it can be made to emit light - in the case of that gas containing mercury vapour this light is largely in the form of shortwave ultraviolet - ideal for exciting highly efficient phosphor compounds.  In all but some of the highest power examples, this is exactly the same process by which they emit light.  They use the same phosphors as fluorescent lamps, similar mercury amalgams, the same sort of glass, and some examples in fact even look very like fluorescent lamps.

Where induction lamps differ from fluorescent lamps however is how the ionisation of the gas filling within the lamp takes place. 

Inside a fluorescent tube, there are electrodes at each end of the tube which transfer an electrical current from the outside world, into the gas within the lamp, and out of the other end.  These electrodes are coated in a special material which readily emits free electrons at a relatively low temperature.  During the lifetime of the lamp, material from these electrodes is gradually "sputtered" away by the emission process until eventually there is insufficient emitter left on the electrode surface, this causes the striking voltage of the lamp to increase until the ballast can no longer supply a sufficient voltage to maintain the discharge.  There is seldom actually anything wrong with the gas filling within the tube or the phosphor itself (though this will lose efficiency somewhat through the lifetime of the lamp) - but the electrodes are simply worn out.  Without a doubt, they are the weak link in fluorescent technology.

Induction lamps do not have any electrodes in contact with the lamp atmosphere.  Instead of the familiar electrodes, there instead is an antenna outside the lamp itself driven at a high frequency (usually in the region of a few hundred kilohertz to a couple of megahertz, with frequencies chosen to avoid interference with other equipment), the radio frequency electrical field from this antenna excites the gas within the lamp, causing light to be emitted.  Because there are no electrodes to degrade, these lamps tend to have very, very long lifetimes.  Philips for example quote a lifetime of 100,000 hours for their QL induction lamps.  Efficiencies are usually on par with similar fluorescent products, though it should be kept in mind that just as with fluorescent tubes that these lamps will gradually diminish in output as they age - however as they will last for a very, very long time that depreciation in lumen output may be more of an issue, as normal fluorescent fixtures can generally be relamped quite cheaply if a drop in output starts to become an issue.

The complex drive electronics in some fields also present somewhat of a liability given the price tag attached to these systems.  They are just as vulnerable to high voltage surges, water ingress or accidental damage as conventional electronic fluorescent lamp ballasts, but are far, far more expensive to replace.  Some makers in fact seem to quote their rated lifetime based on the expected lifetime of the ballast rather than the lamp itself.

This field of lighting has only relatively recently been seeing the light of day outside the lab.  Despite intense research by a number of companies starting in earnest in the 1980s, it was not until the turn of the 21st century that a commercial product was ready for the market, the QL system as was launched in 2001 by Philips.

Since then a number of other manufacturers have launched their own competing products, General Electric and Panasonic both following a similar compact form factor to Philips original QL system, with Osram taking a different route and producing their Endura range (known in the US as the Sylvania Icetron) more along the lines of conventional and slightly more efficient tubular designs.

The high cost of the likes of the Philips QL or Osram Endura systems has largely kept them out of reach of the general consumer, though they have gained somewhat of a foothold in some commercial applications where the long lifetime can lead to a significant reduction in maintenance costs.  The Endura system seems to particularly commonly appearing in new street lighting applications in several areas of the US.  Relatively recently though, more inexpensive lamps have started to appear on the market, one piece units with integrated drive electronics similar to compact fluorescents, ready to just plug in and go.  Whether these will in fact gain much of a foothold will remain to be seen.

Philips QL85
Jacksta 40W Self-Ballasted Retrofit