The flash is triggered by the popup-flash of the 7D.
The signal is transmitted by light, it is just way too fast for the naked eye to see. The popup flash would strobes rapidly, like sending out morse-codes, and the external flash would pick it up and fires in sync. The whole thing is super fast, like in 1/500 of a second.
Understanding that, you now know that the limitation of such approach is that when the light is too weak, it will not reach the flash, and the external flash will not fire.
Another situation is that, when the surrounding it very bright (under direct sunlight for example), the popup flash is relatively weak, and the "morse-code" signals cannot be properly detected by the external flash.
Reducing the distance between the popup flash and external flash should solve this.
I use the 60D, and it has the same system too. I do not do a lot of outdoor daytime shot, I usually have a cable with me should I need off-center external flash. However I use the wireless flash system indoor very often. It is sufficiently reliable when you are in an indoor settings. Provided that you have some walls to bounce some of the light around, it really isn't a must that the flash must be at line of sight.
Ultimately, in an indoor settings, in a small room, I can place the external flash anywhere I want, and it fires no problem. If your portrait work focus on indoor shooting, its absolutely fine.
Finally, you already have the 7D, you do not seem to have the flash unit yet. You must buy a flash regardless which wireless option you choose, right? So why don't you buy a good flash unit, try out the wireless function on the 7D, then decide if you really need other wireless solution?