Basically, the lines starting with * are the conditions so it reads do not match FROM_DAEMON, FROM_MAILER or our X-Loop headers, and only take messages addressed To: (including CC:) . Then the line starting with | is the action which is to use formail to send a reply, insert our X-Loop header then use a file (or two in this case) for the message body.
The one thing to point out is that if you want to setup this reply for many email addresses at once just put a | between them. This is a "regex" pattern so you can do fancier matching criteria if you want.
# bounce messages addressed to firstname.lastname@example.org
* !^X-Loop: email-dsn
| (formail -rt -A"Precendence: junk (autoreply)"\
-A"X-Loop: email-dsn" ; \
cat $HOME/.procmail/change-of-address.txt $HOME/.signature) | $SENDMAIL -t