Balanced Wiring & its Advantages

Professional equipment solves this problem by using two closely-spaced conductors twisted together. Audio is balanced equally on these wires, flowing in a positive direction on one wire while in a negative direction on the other. Equipment looks at the voltage difference between those wires, and ignores everything else. A grounded shield is still used to prevent high-frequency noise, and it might form a hum-gathering antenna -- particularly if there are other ground connections. But since the ground isn't part of the audio path, nobody cares.

A balanced shielded cable.

Most modern circults do not use balanced wiring internally. The internal wires or printed-circuit traces are so short that noise pickup isn't a problem. But they balance the signal before it leaves, and unbalance any incoming ones. This is very easy to do with op amps or transformers. Balanced wires also reject noise that isn't coming from a ground loop. The two conductors are twisted closely together, so any interference radiated into the cable is picked up equally by both. But remember: the equipment is looking for a voltage difference between those wires. Noise is the same on both wires, so the equipment can't hear it.

Another advantage of balanced wiring

If a single-conductor shielded cable acts as an antenna, why doesn't two-conductor balanced wiring act as a double antenna? Answer: it does. Noises from nearby video or computer cables are picked up on each conductor. But remember, a balanced audio input cares only about the voltage difference between the two wires. Interference is radiated equally into each wire. Since the interference is equal on each, there's no voltage difference from it! The balanced input can't even see that the noise is there.
Or to put it into a chart:

Conductor           Audio Signal    Noise     Total on wire
    Black               +1 v          +1 v     +2 v
    White               -1 v          +1 v      0 v

Transmitted difference   2 v
                           Received difference  2 v

This noise-immunity of balanced wiring is why it's also used for high-speed computer networks. Category-5 cable contains four tightly-balanced pairs of wires. In fact, if your balanced input and output circuits are good enough, you can use Cat-5 cable for professional audio wiring! "Star Quad" is four-conductor shielded balanced cable. The four wires form a tighter, more consistent pack than two wires can and can resist even more noise. If you're using Star Quad, you must tie the two pairs of similarly-colored wires together at each end... reducing it effectively to two conductors. Don't try to use it as two balanced pairs for two different signals: this won't give you any noise-reduction benefits at all. 

- ( Source : http://www.dplay.com)

Why wires are noisy?

Why wires are noisy

If your tracks are plagued by noise and low-frequency hum, it's probably because of a wiring problem. But the solution is simple, relatively inexpensive, and has been around for a hundred years. Balanced audio wiring was first used by the phone company, to send calls over hundreds of miles of low-quality wire without picking up too much noise. Today it's used by every audio professional for much the same reason. The problem is that wires are also antennas. When you plug a mic into a camera, or a DAT player into your NLE, you don't just get the desired signal. Any nearby electric fields are also picked up on the wire, adding a slight voltage which the equipment can't distinguish from the desired audio.
You can't avoid these fields. They're created by any other wires that carry a current. This includes video, timecode, and data cables, which can add all sorts of high-frequency whines and whistles to your track.
Manufacturers reduce this antenna effect in a signal wire by wrapping a shield around it, usually a copper braid or metal foil. The shield is connected to ground and shorts out the interference before it can reach the signal wire in the center of the cable. That's why phono, BNC, and cable TV plugs have a center pin and outer metal shell: the pin is signal, and the shell carries the shielding that in the wire.

A typical shielded cable.

Bah, Hum.

Of course the biggest currents in most places are in the wires that supply electricity to lights and and wall outlets. They radiate a lot. Cable shields aren't very effective with this 60 Hertz interference from the power-line frequency. Fortunately, it takes a much longer antenna to pick it up than the higher-frequency interference from video or timecode cables. In a small editing setup with short wires, the amount of 60 Hz pickup is very little compared to the audio voltages, so interference is minimal. But on shoot with long microphone cables, or in a complex post-production setup (my studio has about 3500' of analog wiring), the hum can be a major problem. Furthermore, the same shielding that protects against high-frequency noise can contribute to hum.

-Source (www.dplay.com)