Hi Ravi,
if you use the network tab in firebug/firefox while you see a progressing log output of a running job, you will often find something like
http://<jenkins url>/job/<job name>/<build nr>/logText/progrssiveHtml
This leads to the file /core/src/main/resources/hudson/model/Run/console.jelly and /core/src/main/resources/lib/hudson/progressiveText.jelly of the jenkins-core maven module, where this link is used in the progressiveText tag. The implementation can be found in /core/src/main/java/hudson/model/LargeText.java in the method doProgressiveText.
In short, its an AJAX request called every x seconds adding more console output to the <pre id="out">-html element.
Hope this helps.
Regards,
Frederik