CSS used in the prototyping application (app) is written in the SCSS syntax of Sass.
Sass is an extension of CSS that gives a load of extra features useful in producing CSS for the mass of different devices and browsers.
SCSS was chosen because you can paste CSS into it without breaking it which is useful for prototyping.
The prototyping app uses node-sass, a node version of of lib-sass. It's still a work in progress and so you may find a few things don't work, the most important of which is that @extend mostly doesn't.
We found most other features are in and development is progressing quick enough to work with most prototypes (any bugs we found were quickly fixed). Note that @extend is used in just one place in the toolkit: the clear-floats @extend in _shims.scss.
For the latest details of what's supported, check this article.
We use node-sass for one reason: to keep it as quick as possible to get up and running. It means you have only one thing to do, get Node. Do that and you can run the app.
Your best bet is to use the Ruby version of Sass to compile your SCSS. Functionality for this out of the box will be added soon. Until then, check the docs on using the Sass command-line tool or swap out the grunt-sass plugin for grunt-contrib-sass.
You write your Sass in app/assets/sass and the prototyping app will compile it into the CSS used in your page (found in /public/stylesheets). The app watches your files so this will happen automatically.
There is already a CSS file included to use called application.scss which compiles into application.css. Note that Sass files are identified by the .scss extension.
Every time a change happens in application.scss it will produce a new version of application.css. Make sure to write your css in application.scss as anything you put in application.css will get overridden.
Try starting the app and adding some styles to application.scss. If you open application.css you should now see the compiled version of those styles.