The AVR, like most microcontrollers, uses memory-mapped IO. In a nutshell, this means that a part of the memory space of the microcontroller is reserved for the peripherals. When you change a bit in this area of memory, you're not sending a signal to change a bit of memory, you're sending a signal to change the value of a peripheral.
To understand the details of how this works on your AVR, the Special Function Registers section of AVR-libc (and, more importantly, sfr_defs.h and iom328p.h) are recommended reading.
[Warning: Technical writing ahead, pay close attention] For example,
PORTB is defined as
_SFR_IO8(io_addr) is defined as
_MMIO_BYTE((io_addr) + __SFR_OFFSET).
0x20, the location just after the registers. The space after this address and before
RAMSTART (0x100) is used for the peripherals. Going back to our example,
_MMIO_BYTE(mem_addr) is defined as
(*(volatile uint8_t *)(mem_addr)). Therefore, when you write
PORTB, you're really writing
*(volatile uint8_t *)(0x25), which defines a byte-wide pointer to the location in memory
So, when (in C) you write PORTB |= 0x01, you're really writing the value 1 to the peripheral at byte 0x25, or port B pin 0. If this pin is configured as output (using DDRB, which is at 0x24), PORTB |= 0x01 will cause port B pin 0 to go high. Phew!
So, if you use the assembly instructions (SBI - Set Bit in I/O Register):
sbi 0x24,1 ;Data direction set to output
sbi 0x25,1 ;Set port B pin 0 high
You'll set the pin high.
Of course, use inline assembler with GCC and
#include <avr/io.h> to get the conventional names and simplify your task.
Note that all of the peripherals use this scheme, not just the IO pins. Read iom328p.h if you're interested in the locations of other peripherals.