Cursors in SQL procedures allow defining a result set that can be iterated through row by row. A cursor acts as a pointer to each row in the result set. To use a cursor, it must be declared to define the result set, opened to establish the result set, rows must be fetched from the cursor one at a time into variables, and the cursor closed once complete. The example demonstrates declaring a cursor for a SELECT statement, fetching rows and summing a value, and closing the cursor to return the result.