Like the altimeter, the traditional ASI is a pressure measuring instrument, calibrated directly in units of speed (knots usually). Unlike the altimeter, it is a differential device, measuring the air pressure difference between the static port and the pitot head, which is a ram-air tube facing forward into the airstream. The airspeed displayed will be Indicated Airspeed (IAS), which is Calibrated Airspeed (CAS) with consistent errors; typically, for small planes, the IAS will be lower than CAS at slow speeds and higher than CAS at high speeds.
Knowing the airspeed of an aircraft is vital for the pilot, as almost all measures of performance are critically related to airspeed. Standard ASI markings have been developed for all aircraft so certain critical speeds are colour coded in a standard way (though naturally the actual speeds will vary according to type). A red line indicates VNE, or Velocity (never exceed). This is the absolute maximum airspeed that the aircraft must not exceed under any circumstances. The red line is preceeded by a yellow band which is the caution area, which runs from VNO (Velocity max, normal operation) to VNE. A green band runs from VS1 to VNO. VS1 is the stall speed without flaps. VS0 is the stall speed with flaps down, and this is indicated by the end of a white band which will overlap the green band for part of the way - the upper end of the white band indicates the speed at which the flaps can no longer be lowered - the aircraft must be below this speed before the flaps can be lowered.
At high Density Altitude, the airspeed indicator will show a far lower speed than the aircraft's True Airspeed (TAS), but aerodynamically, the same indicated airspeeds apply. The airspeed indicator is especially important for monitoring V-Speeds while operating an aircraft.
On modern fly-by-wire systems, the ASI is a virtual instrument displayed on a screen in the so-called glass cockpit.