The turbocharger compresses ambient air and directs it to the engine for maximum performance. Because the turbo spins at high speeds, the heat and friction caused by the spinning will eventually wear out the seals within the turbo. When the seals are worn out, the engine will burn more oil and there will be blue smoke coming from the exhaust. When this happens, a turbocharger replacement is necessary.
When performing a turbocharger replacement, the technician removes the exhaust downpipe, the oil and coolant lines, and the air intake from the turbocharger. The the hardware attaching the turbocharger to the exhaust manifold are removed, along with the turbocharger. Then the new turbocharger is installed. Finally the air intake, oil and coolant lines, and the exhaust downpipe are reattached.
Most manufacturer's cover the cost of a turbocharger replacement under the powertrain warranty portion of the factory warranty. There are extended car warranties available that will cover the cost of replacing a turbocharger after the manufacturer's factory warranty has expired.