You can find some basic information in this document: http://pubsvn.ez.no/nextgen/trunk/doc/features/3.8/single_sign_on_handler.txt .
An example implementation can be found in the latest revision of the cookieuser extension ( http://pubsvn.ez.no/community/trunk/extension/cookieuser/ ).
The cookieuser extension contains a patch to backport the sso system to eZ 3.7.
But I consider the cookieuser extension as abandoned and recommmend you to use the "remember me" backport (from the upcoming 3.9 branch) for eZ 3.7/3.8 (<i>http://ez.no/community/contribs/hacks/3_9_remember_me_feature_backport_for_3_8_and_3_7</i>) instead. This patch only contains the "remember me" feature, for eZ 3.7 it does not include the SSO system.