How does terraforming work in the Alien universe?

The subject of terraforming lies at the center of James Cameron’s Aliens, at least when it comes to worldbuilding. Released in 1979, Ridley Scott’s Alien already saw a group of space truckers visit an unknown “planetoid,” which would later become LV-426 in the 1986 sequel. And spacesuits weren’t needed anymore to walk on its surface when Hadley’s Hope went silent. 

After Ellen Ripley and the crew of the Nostromo came across a massive ship of unknown origin filled to the brim with xenomorph eggs in 2122, the Weyland-Yutani Corporation knew they had struck (biological) gold, and a terraforming process was kickstarted as a cover-up in 2159, two years after the colony was established.