You are looking at a composite: The image of the southern lights (Aurora Australis) is superimposed on a "Blue Marble" image of Earth; both images were captured by satellite. Click on NASA's IMAGE Satellite View of Aurora Australis from Space to see a video of this aurora.
Notice that the Aurora occurs at about the same latitude. That's because the Aurora's green light is produced by charged particles from the sun, which collide with oxygen atoms in the atmosphere. These charged particles follow Earth's magnetic field lines. Where these lines come close together, near the two poles (like the field lines of a bar magnet), the Aurora can occur. For more on this process see Astronomy Notes.
