An equalizer works by creating a feedback loop with a audio device while dissecting the signal into individual frequencies. Equalizers primarily are used to flatten the frequency response. This is done by redirecting the wattage from the selected frequencies to another frequency. The idea is to fine tune a system with an EQ, major sound adjustment can be made by relocating the speakers or upgrading to a better system. A good system will have less need for equalization.

Frequency is the measurement of how many times the current alternates between negative and positive per second. The frequency spectrum is read using a logarithmic scale and divided into octaves. Equalizers are classified by the amount of frequencies or bannds they can control. An one octave EQ will have 7 to 9 bands, and an one-half octave EQ can control around 15 bands. Last but certainly not least is the EQ divided into one-thirds octaves. With 30 diffrent controllable bands, they're popular with most nightclubs and studios.

There are two types of equalizers, graphic equalizers verses parametric equalizers. The easiest to work with is the graphic. Normally the graphic EQ has vertical sliders, each slider controls a frequency range. Graphic equalizers allow you to see what frequencies are being effected and exactly how far from zero dB's a given band is set. The down side of a graphic EQ is, it's fixed frequency range limits what it can control. A parametric EQ has adjustable frequency ranges, but is controlled by visually unreliable knobs. Adjustable frequency ranges are a big issue with concert systems because feedback can occur on an odd frequency boundary requiring something more flexible than a graphic EQ. Experience and measuring equipment are most likely needed when tuning a parametric equalizer.

To complicate the matter even more is the way in which the EQ can be set up. Shelving is when the EQ above or below a set frequency is attenuated or boosted, creating a shelf in the frequency spectrum. Bell equalization is when a specific point with in the spectrum is attenuated or boosted. The further a way from the point the less the frequency will be effected.




Sources:
http://www.mediacollege.com/audio/eq/
http://stereos.about.com/cs/componentguide/a/equalizers.htm