Audio and video information has been stored and transmitted in analog form since the inception of radio and television. An analog format is one in which the physical waves themselves (sound waves for audio or light waves for video) are either copied -- as grooves on a vinyl record, patterns of magnetic particles on tape or electrical signals passing through wires and cables -- or sent over the air. To the right is a graph showing the analog wave created by saying the word "hello."
When information is stored and transmitted in digital form, the original image or sound is transformed into information computers can understand -- ones and zeroes. The exact sequence of ones and zeroes can be read by computers (or devices like CD players) in order to replicate the sound or image. That digital information can be copied an unlimited number of times, stored forever and transmitted long distances without the pattern changing or degrading, as long as the digital information isn't lost or corrupted in some way. For a more in-depth look at analog and digital technology, see How Analog and Digital Recording Works.
Today, a lot of information is in digital form, which works out well when you're storing or copying the data, but when it comes to playback, most people are using older equipment that needs an analog signal. That's why most DVD players convert the digital data on the disc to an analog electrical signal before sending it to the TV. When you're watching a DVD on an analog TV, what you're watching isn't digital; and when you're watching a DVD on a digital TV using a typical DVD player, that digital signal has been converted to analog by the player and then back to digital by the TV, which can affect picture and sound quality.