This article is from the Audio Professional FAQ, by with numerous contributions by Gabe M. Wiener others.
Professional transmission lines differ from consumer lines in two
ways. First, consumer lines tend to run about 14 dB lower in level
than pro lines. Second, professional lines run in differential, or
In a single-ended line, the signal travels down one conductor and
returns along a shield. This is the simplest form of audio
transmission, since it is essentially the same AC circuit you learned
about in high-school physics. The problem here is that any noise
or interference that creeps into the line will simply get added to
the signal and you'll be stuck with it.
In a differential line, there are three conductors. A shield, a
normal "hot" lead, and a third lead called the "cold" or "inverting"
lead, which carries a 180-degree inverted copy of the hot lead. Any
interference that creeps into the cable thus affects both the hot and
cold leads equally. At the receiving end, the hot and cold leads are
summed using a differential amplifier, and any interference that has
entered the circuit (called "common-mode information" since it is
common to both the hot and cold leads), gets canceled out.
Differential lines are thus better suited for long runs, or for
situations where noise or interference may be a factor. [Gabe]