"There are many instances where only a portion of an output voltage from a signal source is needed. If we allowed the full output voltage from a home CD player to be driven into the input of an amplifier, the amplifier would play at or near full power at all times. This would become quite annoying in a very short period of time. To reduce the overall volume, we need to allow only a fraction of the full signal through to the amplifier. To control the level of the signal, we use a potentiometer. A potentiometer (also know as a 'pot') is a modified resistor. Potentiometers can be used to allow a change in the resistance in a circuit or as a variable voltage divider (in the case of a volume control). If you have a rotary volume control on your TV or radio, it is (more than likely) a potentiometer being used as a variable voltage divider.* A potentiometer generally has 3 terminals. 2 of the terminals are connected to the opposite ends of a resistive element. The 3rd terminal (usually, is physically in-between the other 2 terminals) is called the wiper. The wiper is a contact (actually, generally many very small contacts) that slides along the resistive element. "

http://www.eatel.net/~amptech/elecdisc/potentio.htm