Applications are installed by copying the necessary files directly to the switch/ folder in the root of the SD card, or in a subdirectory of switch/, in which case said subfolder must be named identically to its executable. Normally the former should be used, unless you want a dedicated directory for the application FS current-working-directory. Applications come with the following:
[appname].nro: The executable.
The Homebrew Launcher will scan the SD card for all .nro files, but will only display an icon for those who have one according to the format described above. You can also freely navigate the filesystem to select an application.
Icon/metadata for each application is loaded from data embedded in the NRO (custom assets section), if available.