Vanilla extract producer Rodelle has a nice description of their extract process:
Step #3 Vanilla Extraction
Vanilla beans are finely ground and placed in stainless steel baskets. The baskets are dropped into large tanks containing a mixture of alcohol and water. The alcohol-water mixture is heated to 130 degrees Fahrenheit and the mixture is continuously circulated through the ground vanilla beans, extracting the flavor.
The process is very similar to a coffee percolator but is much slower, taking roughly 48 hours to complete. The extract is then sent through a series of filters to the aging tanks. Rodelle Vanilla extract is aged no less than 60 days.
The key difference among extract producers is the temperature of the alcohol mixture and aging. Some manufacturers use cold alcohol, rather than 130F alcohol. A cold extraction is said to maintain more of the delicate flavor and aroma of the vanilla beans, but takes significantly longer. Some high quality vanilla is aged one year, rather than 60 days.
The brave may want to make their own hand-crafted vanilla extract — just follow the directions on this site.