An NPN output is named after the kind of transistor (NPN) that is most commonly used in its circuit. The NPN transistor acts as an on/off switch between the output pin of the controller and circuit common (0V). The load, i.e. device being driven by the output, must be connected between the output pin and the positive supply voltage. Electronics people call this arrangement "sinking", while electrical people will be more comfortable with the term "ground switching".
These outputs can only switch DC, and are frequently limited to voltages less than the DC supply voltage of the controller. They will also have a limited current handling capacity of maybe 250mA to 500mA. When turned on and conducting current, there will be some voltage drop across the transistor.
The NPN outputs on most SPLat controllers and expansion boards can handle up to 400mA continuous, with momentary peaks of 500mA. They drop approximately 1V when conducting. The maximum applied voltage is equal to the supply voltage of the controller.