98% of ALL audio gear, including most of the world's finest recording equipment, is internally unbalanced. Unbalanced is normally the most "pure" way to do things in short distances. We probably would have stayed with it forever and not needed Balanced, EXCEPT this happened:
We found out that unbalanced works great inside the guts of the gear when traveling inches or a few feet, BUT once the signal leaves the shielded chassis, and goes out into the real world of modern-day interference and high line impedance, the signal could quickly degrade and the S/N ratio can go down. Also, the grounding system must be very clean, because the ground is being used as the return in this single-ended system.
NEVERTHELESS, if equipment distances are kept short (10-20 feet), and proper grounding and shielding are present all around, then connecting unbalanced allows the "guts" of one equipment to talk directly to the "guts" of the other, without extra transformers or balancing circuitry.
You see, "Balanced" does not occur naturally. (in 98% of gear) It must be CREATED by running the internal unbalanced signal thru either a transformer or some type of "balancing circuitry" (term used very loosely), as it leaves the chassis. Now you have an audio "differential pair", with available ground and shielding options, which can run low impedance for a LONG distance to the next piece of gear. When the signal gets to the next piece of gear, which is unbalanced internally of course, the signal must be converted back to unbalanced, so it must pass thru ANOTHER transformer or "unbalancing circuitry" (term used very loosely) as it goes into the first stage of the receiving gear.
So for large, professional setups like studios, theaters, concerts, film sets, etc, Balanced solves all kinds of problems with a minimum of compromise.
The problem with introducing Balanced into the typical "home system", is inevitably you will be mixing and matching balanced and unbalanced. There are at least a million pieces of gear to help you do this, and a million opinions about correct practices, but they almost all involve compromise.
Scenario: You have 2 pieces of equipment that both have BUILT-IN balanced connections and do not need any extra devices to connect to each other with an XLR cable.
Result: For the price of going thru "a little extra circuitry or transformers", you have a very reliable connection that can travel long distances. It is not likely to provide better sound quality but may provide lower noise. You may also be able to lift the ground if there is a "grounding problem." Also, some people (particularly studio engineers) may not mind running thru an extra transformer or two because they like the "sound" of a particular unit's input or output transformers. No problem.
Scenario: You have a piece of equipment that has both types of connections, and also one that has only Unbalanced connections. You would need an "adapter" of some sort to connect them with a balanced cable.
Result: You should either ignore the balanced and connect Unbalanced, OR if desired, use a high-quality transformer or active (powered) device to balanced the unbalanced piece. DO NOT use any sort of inexpensive passive adapter or splitter, or you will defeat the common-mode rejection, and defeat the whole purpose of the balanced line. DO NOT use a cheap line transformer from Radio Shack, the quality will suffer, defeating the purpose of the balanced connection.
Scenario: You have 2 pieces of equipment that both have only Unbalanced connections. You want to connect them using balanced connections.
Result: The only conceivable purpose for doing this would be if you NEED to separate the 2 pieces of gear by more than 10-20 feet. Then, you should use either high quality transformers or high quality active devices to do the balanced/unbalanced conversions, allowing you to run a longer, low impedance line. If you don't need the equipment to be that far apart, or only have access to cheap, passive balanced/unbalanced adapters, then don't do it. You would be running your signal thru unnecessary stages for no good reason. Stay unbalanced for best quality.
Excellent document about Balanced and Unbalanced connectivity:
http://www.rane.com/note110.html
Believe it or not, it was Ma Bell that discovered much of what we know about signal line transmission.
**The reason why a cheap passive adapter/splitter thingy will RUIN the common mode rejection, is because the term "balanced" basically means "impedance balanced", IE, the 2 signal lines have equal impedance to ground. Most of the passive adapters merely tie pin 1 and pin 3 together, which connects one of the signal lines directly to ground, killing the effect. Also, this can dirty up your grounding system by driving audio signal into it. It can also affect the impedance and result in lower signal level, which, again, defeats the whole purpose.
