Balanced mode is used when there is a lot of radio frequency interference in your area and when you are using very long (greater than 20 feet) interconects to an amplifier. Balanced components are almost exclusivley used by professionals working with sound. The magic, in "truly balanced" components comes from something called "common mode rejection". This technique compares the positive and negative audio signal and filters out anything that is common to both. Normally, anything added to the audio signal (i.e. electrical interference, hum, buzzing, etc.) will be filtered out resulting in a very quiet signal. I may be wrong in some of these details but this is basically it.
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