It's useful to differentiate between an active preamp and a passive preamp.
The term "preamp" traditionally refers to an active preamp. This is a device which does the following functions:
- it raises the gain of the source by a certain factor
- it then lowers the gain (or output) by use of a volume knob
- it has a number of inputs which can be switched between (traditionally)
a passive preamp is simply a volume knob, and it often also has a number of inputs that can be switched between.
Many people are of the opinion that the less "stuff" in the signal chain, the better. for these people a passive preamp is best, assuming that their source can provide a big enough signal to the amplifier.
I used to use a passive preamp because I figured that my power amplifier and my source together were sufficiently loud, so all i needed to be able to do is lower the volume. This was GENERALLY correct, but some tracks are recorded at very low volume, so the signal going into my amplifier was very low even with my volume knob all the way up.
By adding an active preamp, I no longer have this problem. The preamp first makes the signal bigger (so that even the quiest songs are more than sufficiently loud if needed), and then the volume knob on the preamp is used to lower the volume to enjoyable levels
Most amps have preamps built in. Those which do not have preamps built in are usually called "power amps". power amps have no ability to control volume (ie they just pump out full volume all the time), so a preamp is required to control the volume, and in some cases increase the input signaal where the source provides too small of a signal
edit: for a dodgy illustration (and take into account that i'm not at all technically skilled), imagine that a power amp needs 1v input to sound loud. A cd player may output 2v at peak, so for an average song the amplifier has more than enough incoming signal, and all it needs is a passive preamp (volume knob) to lower the 2v signal to become 1v
now imagine that there;s either a low powered source or a quietly recorded song. now all of a sudden the source is only outputting 0.7v. even at full volume on the passive preamp, the amp will not be loud enough (it wont clip even at full volume because the input signal is so small).
Now imagine you add an active preamp which multiples the incoming signal by 2. With the original loud song it becomes 4v (2v x 2), so it has plenty of volume and the volume knob on the preamp is used to lower this 6v to 1v.
For the 0.7v song, we now have 1.4v (0.7v x 2), which is also now has plenty of power, and the volume knob must be used to lower the 1.4v to 1v
preamps can also add flavour to a sound (eg using a tube preamp on a solid state amp)
