There's an article in Stereophile's online archives titled "Balanced: Benefit or Bluff."
In simplest terms, balanced connections involve three wires (and thus the three pins of an XLR connector)--hot, cold & ground; single-ended (using RCA's) generally uses two signal paths.
From Stereophile:
"In balanced working, the signal's positive-polarity connection (+, or hot) and negative-polarity connection (-, or cold) are segregated so that the - is no longer combined with the earth, shield, or ground line. Instead, a three-wire connection gives the ground line its own separate identity. The opposite-polarity + and - signal lines may then be said to be balanced, or set equal with respect to the ground (figs.3 & 4). This balance is engineered, not for aesthetic or philosophical reasons, but so that the next input in the chain can be arranged just to look at the difference between the two audio lines. Every proper balanced input operates as a differential circuit, and any unwanted noise, hum, or interference common to both lines is therefore canceled (fig.4)."
The whole article is
http://www.stereophile.com/features/335/I happen to have BAT gear--phono, preamp and amp. The connection between phono and preamp is ONLY balanced, the preamp offers balanced or single-ended inputs and outputs, the amp accepts ONLY balanced inputs. There ARE adaptors that allow a balanced input to accept an RCA/single-ended output but it's not truly balanced. And there IS some gear that has seemingly balanced outputs (i.e. XLR jacks) where the internal circuitry ISN"T balanced.
Sorry if this isn't an "AHA" moment, but it's the best I could do.
