The engine of a nitro RC is similar in concept to the kind used in full-sized cars. Fuel and air are mixed in a carburetor and then go into a metal cylinder. The mixture gets compressed, then explodes, pushing a piston down which pushes a metal connecting rod to turn a crankshaft. Most nitro RCs, however, use two-stroke engines like those used in weed wackers and many dirtbikes, and they use glow plugs (not spark plugs) like diesel engines. Finally, they use a specially-formulated combination of nitromethane and lubricants, not gasoline.
A single servo is used to control the speed of the engine, and thus ultimately the vehicle, when it rotates. It pulls on a throttle lever or slider that's part of the carburetor assembly. On land vehicles, the servo is also connected to the mechanical brake so that when reverse throttle input is given, the vehicle slows.
The exhaust system of a nitro RC is generally simple in construction. You have a header, which is effectively a length of curved metal tubing, that routes exhaust gasses into a muffler, or "pipe." The muffler not only reduces sound, but performs an essential function of providing backpressure that helps 2-stroke engines clear themselves out and cycle in fresh fuel.