Computers can transfer data either in parallel or serially. Parallel transmission sends multiple bits simultaneously over multiple lines, and is used for short distances. Serial transmission sends one bit at a time over a single line, allowing data to be transferred over longer distances but more slowly than parallel. The document discusses using serial communication between a microcontroller and LCD, using ULN 2003 to control devices like stepper motors, DC motors, servos, and relays by sending data bit-by-bit over longer distances.