There are different models which does different things. Not only have the technology changed through generations but cheaper models does not have the most advanced technologies installed.
For final navigation most robots use directional IR light signals. You can see the IR lamps using a cell phone camera. The docking station have two IR lamps which blinks at different rates. One is aimed to the left and the other to the right. The robot have an IR receiver on the top which can see the signal from the docking station. This means that it knows if it is too far right or left or if it is in the center. This is very similar to how airplane landing navigation systems work except with IR instead of radio.
But in addition to this most robots will automatically map out the rooms using their sensors. So it knows where it is and remembers where the docking station was last seen. When it needs to return back it will try to navigate using its internal map to where the docking station. The IR signal is used when it gets close though as the robot might not be exactly where it thinks it is and the docking station might also have moved, possibly because the roomba bumped into it.
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