Basically, when your stereo or home theater system plays music, it reads the digital data off a CD, for example, and then translates it into an electrical signal, which it then sends out to your speakers. The speakers contain cones that vibrate according to fluctuations in the signal and reproduce the sound of that screechy guitar solo by Jack White or Adele's melodious voice. That's where audio cables come in -- they provide the connection and the route by which the signal is transmitted.
At the core, an audio cable is a bunch of braided strands of metal -- usually copper -- that's capable of conducting an electrical signal. The cable is coated with an outer jacket of plastic insulation and -- in the case of state-of-the-art cables -- additional layers of shielding, which is designed to keep the electricity in and prevent radio waves or other electromagnetic sources from interfering with the signal. With old-school speaker wire, a stereo owner had to use a knife or another tool to pare away some of the insulation and bare the end of the braided wire, so that it could be plugged into a spring clamp on the back of the speakers. Today's audio cables, though, often have a pin or plug connector on the back, which makes for less of a mess [sources: Procosound.com, Schaub].
In a perfect world, a cable would transmit that current perfectly, but in reality the metal in speaker wires generally creates a certain amount of resistance, which means that not all the electricity gets through. Consequently, the sound that comes out of your speakers isn't as true to the recording as it could be. The longer the wire has to stretch, the more resistance you get. One way to cope with this problem is to use a thicker gauge of wire, which increases the wire's ability to transmit electrical current. You can tell a wire's thickness by looking at its American Wire Gauge (AWG) number, which is the inverse of its thickness -- the lower the number, the thicker the wire is. For distances of less than 80 feet (24.4 meters), you usually can get by with a 16-gauge wire [source: Home Depot].