How do plant sterols lower "bad" cholesterol if they are cholesterols, or plant lipids themselves?

Plant sterols are classified as "good cholesterol" (HDL-High Density Lipoprotien) . The bad cholesterol is LDL - Low Density Lipoprotein. A good cholesterol (HDL) is different from the bad cholesterol (LDL) in its molecular content because it has less fat (lipid) and more protein, against the bad cholesterol -LDL which has more fat (lipid) than protein content. The less fat - the less prone to heart diseases. The "good" cholesterol also is different from the "bad" in it's specific function. The good chole is responsible in transporting fat from the liver to be excreted outside of the body, while the bad chole transports fat from the blood stream to the liver for metabolism; so in a sense, the bad chole brings fat into the body , while the good chole brings fat out of the system.

The more fat retained in the system, the more prone a person is to cardiovascular diseases and related conditions.

As an additional info, cholesterol is also the basic nucleus of steroid hormones - like estrogen and testosterone - which are very important in the development of our secondary sexual characteristics - a very important function that I would like to mention.

The absorption of sterols by the small intestine is remarkably competitive. Remember that cholesterol is a fairly complex molecule - the body doesn't like to synthesize it if it doesn't have to - so it is very eager to absorb it from the digestive tract. The molecular machinery responsible for this also binds very tightly to sterols, and though the response elements of steroid transporters can bind to plant sterols, they can't be processed by the liver into a useable form, and so they are excreted. In essence, they compete for absorption with cholesterol. It should be noted, though, that no large scale, controlled has conclusively shown that plant sterols are particularly effective in practical dosages. The ones that have shown efficacy have used many, many GRAMS per day of the sterols, which is simply not a realistic dosage of these. For now, our best option is to eat less butter, and switch to soy milk. :-)

Red yeast rice can affect the liver adversely. It works much or just like statins, but 'natural'. Like statins, it would produce myalgia and other muscle pains which drove users OFF of statins. Plant sterols in theory do not cause these issues.