How does mapping & other software reckon distance between cities/zipcodes?

Many online applications including mapping an job search boards allow respondents to specify a starting city or zip code and then find all other entries within a specified milage of the entry point. What kind of database and code allows for this type of calculation? Is there a shareware module that can be added to any application to perform this type of search calculation given mutiple data entries at various distance locations from the starting point?