Dai has given a brilliant explanation of how it works, and the product itself is brilliant and a large part of making whatever system we have work.
The digital one is even better because it so easy to alter without taking anything apart.
I have three, and have had problems. But every single time the problem has been within my system and something i have done. It's when you keep messing about with them that you are more likely to cause damage.
I have a hot system- which despite someone earlier saying that i just mention this for the sake of it- does behave differently. This turned out to be part of the problem I had, because the systems characteristics changed from being cold on start up to hot ten minutes later.Because of this I kept thinking I'd fixed my latest problem (vari hunting or cycling in short bursts), only for it to return once I was up to temp.
Anyway I finally figured it out and can't recomend the digital varistream highly enough.