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I am confused about one point I have read the following paragraph from the networking book. “the twists in the twisted pair cable are used to avoid the unwanted signals. For example one twist, one wire is closer to the noise source and the other is farther; in the next twist the reverse is true. Twisting makes its probable that both wires are equally affected by the unwanted signal. This means that the receiver which calculate the difference between the two receives no unwanted signal.”

Now ok I understood the purpose of twists but I am confused about how receiver will calculate the difference when it will receive the signal?. How unwanted signal will be eliminated ? Another thing that I want to make clear is , I am beginner please provide such an answer that can be understood.

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While this is loosely related to our trade it's an electrical question, rather than system administration. I recommend you refer to proper electrical and/or electronic texts for an explanation. –  John Gardeniers Apr 24 '10 at 9:30

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A 'voltage' as such, is very difficult to measure. In fact, it's hard to even define it. What's always used is a 'voltage difference'. A typical 'AA' battery uses chemical energy to keep a voltage difference of 1.5V between its contact points. A light bulb will light up when a voltage difference forces electric charges to flow through its filament.

Think of a waterfall, the energy of the fall depends only on the difference between the altitude at the top and the bottom of the fall. it doesn't matter if it occurs on top of a mountain or at sea level, as long as the fall itself is the same length.

in old 'single ended' signals (like rs-232, a parallel port, old IDE), bits are represented by the voltage of individual wires.... and a 'reference point' (or ground connection). it's always a voltage difference, but the reference is constant, so it's not always mentioned.

in 'differential signals' (ethernet, 'ultra scsi', any modern serial port (USB, SATA, SAS, FireWire, even PCI-ex!)), each signal is carried by two wires, usually twisted together (or very close traces on a printed board), and the receiver doesn't use a common reference point to measure the voltage difference, it uses the difference between the two signal wires. This way, it doesn't matter if wire A is 22v and wire B is 25V, or A is -10v and B is -7V; it only matters that B is 3V higher than A.

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Wikipedia has a good article on twisted pair (excerpt below):

In balanced pair operation, the two wires carry equal and opposite signals and the destination detects the difference between the two. This is known as differential mode transmission. Noise sources introduce signals into the wires by coupling of electric or magnetic fields and tend to couple to both wires equally. The noise thus produces a common-mode signal which is cancelled at the receiver when the difference signal is taken. This method starts to fail when the noise source is close to the signal wires; the closer wire will couple with the noise more strongly and the common-mode rejection of the receiver will fail to eliminate it. This problem is especially apparent in telecommunication cables where pairs in the same cable lie next to each other for many miles. One pair can induce crosstalk in another and it is additive along the length of the cable. Twisting the pairs counters this effect as on each half twist the wire nearest to the noise-source is exchanged. Providing the interfering source remains uniform, or nearly so, over the distance of a single twist, the induced noise will remain common-mode. Differential signaling also reduces electromagnetic radiation from the cable, along with the associated attenuation allowing for greater distance between exchanges.

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