Germany aren't in the Confederations Cup. They're in the U21 Euro Championship.
Basically, the FIFA confederations are a way of grouping teams for (I assume) World Cup qualifiers.

Asia is represented by Iraq, The Asian Cup winners
Africa is represented by Egypt, who won the African Cup of Nations
N. America is represented by the USA, who won the Gold Cup
S. America is represented by Brazil, who won the Copa America
Europe is represented by Spain, who won the European Championships
Oceania is represented by New Zealand, the Nations Cup winners.
Italy are there as they're the reigning world champions.
South Africa are the hosts.
( WHARRGARBL, Thu 18 Jun 2009, 22:15, archived)

Best way to look at it is like a "Champion of Champions" tournament.

( WHARRGARBL, Thu 18 Jun 2009, 22:16, archived)