Shortphuse wrote a good blog entry about transistors. You can see that here: http://www.circuit-hut.co.uk/Transistors-blog<

In addition to that post I would like to add the following.

How a transistorⁱ works as a switch.

A transistor is basically an electronic switch, but because of how the transistor works it also allows signals to be amplified.

Transistors are used as switches for high current applications such as power supplies and also low power applications such as logic gates, where the output needs to be 1 (on) or 0 (off)

We use a transistor as a high power switch when the current available in a circuit is not sufficient to power the device. For example. a pulse from a NE555ⁱ timer circuit would not be sufficient to turn on a lamp or power a large relay coil. So, we use the low current pulse, from the timer circuit and apply it to the base of the transistor to allow a large current, sufficient to power the device to flow. The emmitter is marked with an arrow in this case this is a NPNⁱ transistor.

here is an example circuit using a 555ⁱ timer to output a small current which is then switched using a transistor:

R1, R2 and C all determine the frequency of the output and R3 is the resistorⁱ to protect the transistor.

If you are using a motor, relay or coil you should use a diode to protect the transistor from high voltage surges when the device powers up & down.

You can see how useful the transistor is in this application, without it you would have not be able to power the device using the minimal current output from the 555 timer.