Let's say you want to record drums using 2 mics, a kick and an overhead, and you want each mic to record to its own track so you can eq etc. each track seperately.
If you've got a 2 bus mixer with one pair of stereo outputs, and you don't pan the 2 mic channels, then the kick mic signal will be distributed equally between the left and right stereo outs, as will the overhead mic. When you feed the 2 mixer outputs into 2 the inputs on your soundcard, and you've armed you're recording software to record track 1 from input 1 and track 2 from input 2, you'll get the both the mic signals on track 1, and repeated again on track 2. There is no seperation between the 2 signals.
OTOH if you do pan the kick mic channel hard left, and the overhead channel hard right, the stereo mixer output will now contain kick on the left channel, and overhead on the right. Track 1 will record the kick from input 1 and track 2 will have the overhead from input 2.
Whew, it's a lot easier to show someone than explain...
