Explaining CDMA (Code-Division Multiple Access) technology is very difficult as it involves some pretty complex...
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math. But let me see if I can give you the basics. The whole idea behind CDMA technology is to send digital information, ones and zeros, over the air. CDMA stands for "Code Division Multiple Access", so what we're trying to do is to allow multiple independent streams of digital data to exist in a given piece of bandwidth ("spectrum", in the case of wireless) simultaneously. So, what we do is "code" each zero and one as a much longer string of bits -- up to 64 bits in the case of CDMA technology. We choose these codes (also called "chipping codes" or "Walsh" codes) so that they cause only minimal interference to one another. The technical term for this is the codes are "orthogonal." We can therefore send some number of these over the air, at the same frequency, at the same time, with very little degradation or interference. A given receiver just looks for the codes of its corresponding transmitter, converts the codes back to ones and zeros, and that's about it. In practice, though, this is very, very complex, with many difficult issues -- no wireless technology, even CDMA, works all the time.
I've found the best way to explain CDMA technology is via the following analogy. Suppose you're at a cocktail party at the United Nations. Dozens of languages are being spoken simultaneously, but someone who speaks only English, for example, will have little trouble hearing and understanding someone speaking English even among all the noise that the other traffic represents. As long as you're listening for what you're interested in, this usually works. Of course, the surrounding noise might eventually drown out whomever you're listening to -- but, you get the point. Finally, note that all 3G technologies are based on CDMA -- a real testament to the power of what many thought, back in the early '90s, would never work in commercial applications.
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