The input-output subsystem allows communication between the central computer system and external devices. Peripherals like keyboards, printers, and storage devices are connected via interface units that resolve differences in data formats and transfer rates. There are two main methods for organizing input-output - isolated I/O uses separate instructions to access interface registers, while memory-mapped I/O accesses peripherals through memory addresses on a shared bus. Asynchronous transfer between asynchronous units like the CPU and I/O interfaces requires control signals to synchronize the transmission of data.