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From the source

Audio-video distribution systems work very much like a computer router. They receive a signal and distribute it to different locations in your home. The system revolves around the distributor itself, which is essentially a box with plugs to accommodate your components. Your input devices, like cable or satellite television signals, CD player, DVD player, iPod, satellite radio, and Internet connection plug into the back of the box.

Distributing the sources

Cables come out of the distributor and head to devices located throughout your home. This could mean televisions in the kid's rooms, speakers in the hallway or an amplifier and speakers in the dining room. The signal is shared to other devices by the distributor, over wires that have been laid out.

Receiving the source

Output devices, like speakers or video displays, receive the signals as if they were directly connected to the signal. In some cases, the distribution systems come with additional features. For instance, some systems with wall or ceiling speakers and no amplifier will have a wall control that controls power and volume. Other systems allow a PC to interface with the Internet in order to distribute streaming audio or video.