They crush the glass into small particles and either add them to new glass or melt the particles down to reuse w/o adding it to new glass. The colors are seperated just to make it easier to obtain the desired colors in the end. If they weren't seperated, you'd just get some kind of mud color.
Used glass it sorted and broken into a workable size.
it is called cullet.
it is either remelted or mixed with raw materials to make new glassware (bottles etc.)