Single molecule localization is based on the fact that if an object emits light it can be seen on a dark background no matter how small the object is, as long as it emits enough photons. It means that even one single molecule emitting photons can be detected on a microscope with a good detector.
The single point source will show off as diffraction delimited spot in the imaging system. The middle of the spot is the location of the molecule. However when two molecules close to each other start to excite light at the same time, the individual molecules can not be resolved anymore. Single molecule localization microscopy uses imaging protocols in which the change of two molecules close to each other exciting photons at the same time is reduced. For this technique a special environment is used (buffers) and many images have to be made, which makes the technique very slow. The result consists of a table with localizations, which can be represented as an image.