The code first transforms v is such a way that is is entirely null, except the left most one that remains. Then, it determines the position of this first one.
First let's see how we suppress all ones but the left most one.
Assume that k is the position of the left most one in v. v=(vn-1,vn-2,..vk+1,1,0,..0).
-v is the number that added to v will give 0 (actually it gives 2^n, but bit 2^n is ignored if we only keep the n less significant bits).
What must the value of bits in -v so that v+-v=0?
obviously bits k-1..0 of -k must be at 0 so that added to the trailing zeros in v they give a zero.
bit k must be at 1. Added to the one in vk, it will give a zero and a carry at one at order k+1
bit k+1 of -v will be added to vk+1 and to the carry generated at step k. It must be the logical complement of vk+1. So whatever the value of vk+1, we will have 1+0+1 if vk+1=0 (or 1+1+0 if vk+1=1) and result will be 0 at order k+1 with a carry generated at order k+2.
This is similar for bits n-1..k+2 and they must all be the logical complement of the corresponding bit in v.
Hence, we get the well-known result that to get -v, one must
leave unchanged all trailing zeros of v
leave unchanged the left most one of v
complement all the other bits.
If we compute v&-v, we have
v vn-1 vn-2 ... vk+1 1 0 0 ... 0
-v & ~vn-1 ~vn-2 ... ~vk+1 1 0 0 ... 0
v&-v 0 0 ... 0 1 0 0 ... 0
So v&-v only keeps the left most one in v.
To find the location of first one, look at the code:
if (v) c--; // no 1 in result? -> 32 trailing zeros.
// Otherwise it will be in range c..0=31..0
if (v & 0x0000FFFF) c -= 16; // If there is a one in left most part of v the range
// of possible values for the location of this one
// will be 15..0.
// Otherwise, range must 31..16
// remaining range is c..c-15
if (v & 0x00FF00FF) c -= 8; // if there is one in either byte 0 (c=15) or byte 2 (c=31),
// the one is in the lower part of range.
// So we must substract 8 to boundaries of range.
// Other wise, the one is in the upper part.
// Possible range of positions of v is now c..c-7
if (v & 0x0F0F0F0F) c -= 4; // do the same for the other bits.
if (v & 0x33333333) c -= 2;
if (v & 0x55555555) c -= 1;