Hi all, sorry it took a while to get back to this.
Herman thought I did not present some balanced sources, so I will repeat myself. Nearly all phono cartridges made today are balanced sources: the Shure M-95 from 30 years ago was a balanced source, as is a Titan or a Ruby made today. Ever wonder why mag phono is the only source that requires a grounding wire? Most balanced sources that you try to run single-ended behave this way unless you ground loop the signal with the ground. Or have a grounding wire...
Microphones such as the Neumann U-67 are balanced. So are RCA DX77 ribbon mics. If you wonder why I bring up recording equipment, its because we all listen to this stuff in our recordings: Nearly all LPs and CDs are mastered using balanced connections and equipment.
When you think about it, there really aren't any true single-ended sources. I suppose a tuner might be, but the radio station makes the signal in the balanced domain, so really the tuner is a signal filter of sorts... A CD player might be, but the laser beam is picked up by an optical device, which has an output that is balanced (although its not always used that way). Certain lo-fi devices are single-ended- cheap ceramic microphones for example. No-one in high end audio uses them though :)
I was also chastised about mentioning the phone company. Its not as obtuse as you might think, but you do have to know some history. I'll try to explain it better. Before balanced lines existed, there was no such thing as long distance more then a couple hundred miles as definition was lost very qucikly. You had to yell at the top of your voice to be heard. Balanced lines were developed as a solution, and due to the increase in definition and improved signal transmission, continental and intercontinental phone calls became possible.
The recording industry quickly realized the benefit: lower noise, much lower loss of signal detail, lower distortion and dramatically increased immunity to interconnect cables (does this sound like anythihg audiophiles might be interested in too?). By the early 50's, balanced lines were in place throughout the recording industry and ushered in the age of HiFi and the Golden Age of Stereo.
There was an important point there. These are things that audiophiles find important! Increased definition? Lower noise? Lower distortion? Immunity to cable weaknesses? Yes. We find these things to be important as they bring us closer to the musical experience.
For some reason (mostly cost), balanced line remained the domain of the professional market until the 1980s, when the first balanced gear for the home appeared (FWIW the first balanced tube preamp was made by us in 1989). It took 30 years, but finally balanced line was available for the home with the same benefits to audiophiles that brought them HiFi in the first place.
These days it is hardly more expensive to build balanced stuff as it is to build single-ended. Look at the tube preamps that are out in the marketplace and you see what I mean. Most of them are single-ended. The few that are balanced do not cost any more then the competition. With semiconductors, OpAmps all have balanced inputs. If you are running semiconductors its almost harder to make single-ended. For the record.
The gain thing:
Balanced allows for the same gain with less noise, close to 6 DB less noise, easily achieved. Despite imperfections caused by mismatches, tube issues and the like this remains true. When people say otherwise its because they have not played with these circuits- if they had then they would know!
Another interesting fact about balanced differential circuits is that there is a distortion-cancelling feature. This effect works even if the circuit is not perfectly balanced. Again, if you work with this stuff, you find these things out.
It is possible to operate things like EQ for LPs in the differential domain, and never have to worry about how well balanced your circuit is: the EQ will always be correct.
Volume controls and switches when executed in the balanced domain tend to be more accurate and less noisy then when the same types of switches and volume controls are single-ended. To give you an example, let's say there is a defect causing a volume control to drop out at a certain level. With single-ended, the signal is gone! With balanced, the signal drops only 6 db. In the case where a stereo volume control had poor tracking from channel to channel, with the balanced version the tracking problem would probably not even manifest until things got a lot worse (to the point where the SE version would be unusable rather then inconvenient).
I can offer a ton more of things like this, so again I have to state: Herman is wrong on every point offered. So Herman, contact me off line (or call me) and I'd be happy to fill you in. There are also a number of fabulous texts on the subject if you are interested. This is not about anyone taking a drubbing, I'm happy to help out.
And finally, I appreciate being allowed to try to set the record straight. Again, if you don't believe me, there is a mountain of evidence out there that shows how balanced lines perform better and there is no evidence to the contrary (although there is a lot of hearsay). There is a lot of myth, and in general audiophiles (myself included) tend to let go of these myths slowly if at all. We have to be constantly vigilent about this sort of myth if we are to advance the state of the art.