Occasionally people ask about the algorithms used in JTS's overlay operations. I don't have a good answer for this, since I basically made it up (in an informed kind of way), and haven't had time to document it to the level I'd like (thank goodness for self-documenting code... 8^)
I recently came across this web site from back in 1998, which is happily still around. It has a good list of implementations of what it calls Polygon Boolean operations. (This is the same thing as the JTS overlay operations - I chose to use a different term to avoid confusion with the spatial predicates). Perhaps some of these sites have done a better job of documentation! There's also some useful references to academic papers covering aspects of the issue.