A standard surge protector passes the electrical current along from the outlet to a number of electrical and electronic devices plugged into the power strip. If the voltage from the outlet surges or spikes -- rises above the accepted level -- the surge protector diverts the extra electricity into the outlet's grounding wire.
In the most common type of surge protector, a component called a metal oxide varistor, or MOV, diverts the extra voltage. As you can see in the diagram below, an MOV forms a connection between the hot power line and the grounding line.
An MOV has three parts: a piece of metal oxide material in the middle, joined to the power and grounding line by two semiconductors.
These semiconductors have a variable resistance that is dependent on voltage. When voltage is below a certain level, the electrons in the semiconductors flow in such a way as to create a very high resistance. When the voltage exceeds that level, the electrons behave differently, creating a much lower resistance. When the voltage is correct, an MOV does nothing. When voltage is too high, an MOV can conduct a lot of current to eliminate the extra voltage.
As soon as the extra current is diverted into the MOV and to ground, the voltage in the hot line returns to a normal level, so the MOV's resistance shoots up again. In this way, the MOV only diverts the surge current, while allowing the standard current to continue powering whatever machines are connected to the surge protector. Metaphorically speaking, the MOV acts as a pressure-sensitive valve that only opens when there is too much pressure.