When you run a signal through an amplifier circuit, the amplification does alter the signal a bit. This distortion has a measurement associated with it.
But you must realize, a amp/receiver rated at .. 80 watts per channel can produce 90/100/110 amps of power - but at the cost of higher distortion. The increase is geometric, not linear.
So a maker of cheap electronics can claim to produce a "powerful" 120 watts per channel. But when you read the fine print it has something like "0.7% THD".
A better unit would be a Yamaha/Dennon producing 80 watts per channel at 0.09 % distortion. This indicates a much better quality set of electronics.
I believe (running from memory here) that humans can detect when distortion reaches 1-2% at the frequency we are most sensitive to (about 10,000 hz).
So the THD numbers do 2 things:
- Allow you to compare the specs from one unit to another. (Dont even try to compare the power ratings between the two units stating 0.09% and 0.7% - they are not in the same class).
- Give you an indication of the quality of the amplifier section.
There are a few other fine-print details to look for:
The power ratings should also say something like:
8 ohm resistive load
All channels driven
Hope this helps.