Sound Basics:
To understand how speakers work, you first need to understand how sound works. Inside your ear is a very thin piece of skin called the eardrum. When your eardrum vibrates, your brain interprets the vibrations as sound -- that's how you hear. Rapid changes in air pressure are the most common thing to vibrate your eardrum. An object produces sound when it vibrates in air (sound can also travel through liquids and solids, but air is the transmission medium when we listen to speakers). A vibrating object sends a wave of pressure fluctuation through the atmosphere. When the fluctuation wave reaches your ear, it vibrates the eardrum back and forth. Our brain interprets this motion as sound..

Differentiating Sound:
We hear different sounds from different vibrating objects because of variations in: (a) Sound-wave frequency - A higher frequency simply means that the air pressure fluctuates faster. We hear this as a higher pitch. When there are fewer fluctuations, the pitch is lower. (b) Air-pressure level - This is the wave's amplitude, which determines how loud the sound is. Sound waves with greater amplitudes move our ear drums more, and we register this sensation as a higher volume.

A Microphone:
A Microphone has a diaphragm that is vibrated by sound waves in an area. The signal from a microphone gets encoded on a tape or CD as an electrical signal. When you play this signal back on your stereo, the amplifier sends it to the speaker, which re-interprets it into physical vibrations. Good speakers are optimized to produce extremely accurate fluctuations in air pressure.

The Speakers:
A speaker is essentially the final translation machine -- the reverse of the microphone. It takes the electrical signal and translates it back into physical vibrations to create sound waves. When everything is working as it should, the speaker produces nearly the same vibrations that the microphone originally recorded and encoded on a tape, CD, LP, etc.