Excellent question
I found this on a site.
http://www.dfan.org/pitch.html[It was edited for clarity.]
What is absolute pitch?
Having absolute pitch means that you can hear a note and tell and know that it's a G, or an E flat, or whatever.
People who can identify pitch seem to fall into two categories.
One consists of people who have just always had the ability. They all started playing musical instruments while very young (5 years old or younger).
They hear a note and Just Know what it is.
The other category consists of people who have consciously acquired the ability at a later age.
They tend to identify pitch by having one or two reference pitches in their head (typically an open string on a violin, or something).
When they hear a pitch, they can compare it to the reference pitch, see what the interval between the two pitches is, and calculate the pitch that they heard from that.
It seems to be much more of a conscious thing, though people can become pretty quick at it.