Shell Programming and Scripting

I recently came across this construct that i am not able to understand.
ex: cat $(grep -l 'HELLO' *)
the above command prints out the contents of the file if HELLO string is present in the file. I am not able to understand the usage of "$(" here.. can anybody help me understand this? $anything is used as a variable name where as here the function of $ seems to be different. How does this work?.

$(...) spawns a shell for executing the commands. It is similar to `...`

So $( grep -l Hello * ) will output a file name which is fed to cat and thus the it is as good as cat file_name

--ahamed

Note that, at least for ksh93, in the obsolete form `...`, the string between the quotes is processed for special quoting characters before the command is executed. This does not occur with $(...)