Stereo sound systems can be either "true" or "natural" stereo in which a live sound is captured, with any natural reverberation or ambience present, by an array of microphones, or "artificial" or "pan-pot" stereo, in which a single-channel (mono) sound is reproduced over multiple loudspeakers. By varying the relative amplitude of the signal sent to each speaker an artificial direction (relative to the listener) can be suggested.
The control which is used to vary this relative amplitude of the signal is known as a "pan-pot" (panoramic potentiometer). By combining multiple "pan-potted" mono signals together, a complete, yet entirely artificial, sound field can be created. In technical usage, true stereo means sound recording and sound reproduction that uses stereographic projection to encode the relative positions of objects and events recorded.
So the two microphones are placed in strategically chosen locations relative to the sound source, with both recording simultaneously. The two channels will be similar, but each will have distinct time-of-arrival and sound-pressure-level information. Stereo recordings often cannot be played on monaural systems without a significant loss of fidelity. Since each microphone records each wavefront at a slightly different time, the wavefronts are out of phase; as a result, constructive and destructive interference can occur if both tracks are played back on the same speaker. This is known as phase cancellation.