The ELM327 does all the header and checksum work internally so you don't have to. That's kind of the main reason for it, along with dealing with different protocols.
The H1 command enables displaying all the extra data that comes from the ECU. The last byte is the checksum. That value is calculated from the data payload (excluding the header) by adding all the bytes up. It's just 8 bits, so it rolls over each time it goes over 255. It's pretty simple stuff.