A cell has 2 states, alive or dead. If an alive cell has 2 or 3 neighbours, it stays alive to the next generation. If a dead cell has exactly 3 neighbours, it becomes an alive cell. All the rest cells become dead cells in the next generation. Before you start, paint a pattern on the grid. then move your mouse on the "play button" (Note: do not click it, because you will draw behind it). The generations will change in about the same speed as in the original game. To stop, do the same thing. You can also clear the grid, the same way as the play button. If you see inside, you will notice an empty sprite. You can make costume, click the "show" setting, clear the screen and click the "hide" setting. Then you will have created a pattern using this costume.
Thanks to griffpatch for the "Simple Grid List Tutorial with Image Scanning" for the basic engine. All the rest by me. Warning: Beta version. Alive cells in the edge of the screen may lag. They may teleport to the other side of the screen, or behave very strange.