My recollection (and I may still have one of those things in the basement somewhere) was that you plugged it in inline with your PS2 keyboard and when you scanned a normal barcode it just spit it out as if you had typed the number on your keyboard. Like if you were typing a term paper in MSWord and your annoying roommate snuck in and started scanning things, you'd have a whole lot of random pieces of barcodes in between words. A cuecat was a second keyboard, as far as your computer was concerned.
No software needed, no firmware updates, nothing. No need to do anything at all with the provided CD. And that was the problem, as people who wanted a barcode scanner could just go grab a free one from Radio Shack. Some people were visiting every single Radio Shack within driving distance grabbing as many as the hapless employees were willing to give them.