From TheBestCaseScenario

[edit] General concept

A power supply, or also known as a PSU, or power source unit, is what gives power, or "voltage and current", to something else that needs it.

The term power supply can be used as known in the computer world: a big heavy, or not, box that has a mess of cables coming out of it and getting plugged in all sorts of devices, the mother board.. This isn't such a scientific description, but now you all know what it is.

[edit] What does it do?

What a power source does in general is either give a constant voltage drop or a constant current, while the other varies. That is why it called a power supply or source. Because it gives both. nd voltage multiplied with current is power. Most circuits need a constant voltage drop and most equipment is designed to take advantage of that. 12V, 5V and 3.3V are common in computers, but a power supply can give less or above mains voltage. It gets complicated, but you could see a 32V, 70V, and +/- supply.. Also, the constant current supply is also very used, but not to the naked eye. Wherever a couple of transistors do their stuff, and they do it outside binary code limitations, there is a current source, used to help those transistors work :) Of course, they need a constant voltage supply too, but usually no one except professionals need to know the intimate workings of stuff ;)

[edit] How...?

Usually, a step-down transformer is connected directly or via another circuitry to the mains, and it transforms the voltage there in the needed one. Stepping down means it takes a big number and makes it smaller. But the amperage grows! Example: a 400W PSU on the 12V line only means about 33 amperes. But to get that power from the mains, only 2 or 4 amperes are needed from the mains (230 or 115V). If you would do your own power supply building, you would need that transformer to get the voltage down and do it at the required power level without burning itself up. After getting the voltage closer, be it for your PC or other needs, you end up with a really bad signal to use in any normal conditions: a lumpy, sinusoidal shaped one. That's because mains is a sine wave :) Well, the sine is rectified with diodes, smoothed with capacitors and electronically shaped even further to as close as possible a DC (direct current, good for electronics everywhere, opposed to AC - alternating current, useful for transporting electricity to your home). What you get out of a power source is a known and stable voltage or current that you should be able to rely on.