On pp. 203–204 of the TeXbook, Knuth describes how TeX absorbs macros' arguments: delimited go until the first appearance of the delimiter, and undelimited go until the next token, in both cases ...
There have been a few questions about braces recently, specifically about when to use them (see this and that question). Note: I had mistakenly stated that SamB was the author of both questions. But ...