A balanced audio connection has three wires. Two of these are used for the signal, and the third is a ground and is used to shield the other two. The signal is the difference between the two signal lines. Much of the noise induced in the cable is induced equally in both signal lines, so this noise can be easily rejected by using a differential amplifier or a balun at the input.
If the power amplifiers of a public address system are located at any distance from the mixing desk, it is also normal to use balanced lines for the signal paths from the mixer to these amplifiers. Many other components, such as graphic equalisers and effects units, have balanced inputs and outputs to allow this. In recording and for short cable runs in general, a compromise is necessary between the noise reduction given by balanced lines and the noise and distortion introduced by the extra circuitry they require.
While XLR connections are the most common balanced connector, 1/4" TRS (Tip Ring Sleeve) connectors are also commonly used.