Can someone please explain to me what tone pots are, and how they affect the sound of a guitar? Thanks very much :)
A potentiometer is basically a variable resistor. When it's turned all the way one way, it has no resistance, and when it's turned all the way in the other direction, it has its maximum resistance.
A pot has three soldering points: its input, its output, and ground. So when the output of your pickups is wired to the input of the pot, the pot splits the signal in two directions, one of which leads to the output jack of your guitar and the other of which leads to ground. The signal from the pickups wants to go to ground, but if the pot is turned to its maximum resistance, it acts as a block to the signal, which then has to go to the output of the guitar instead. As you turn the pot, its resistance weakens, so more and more of the signal escapes to ground instead of going out the guitar's output, and so you perceive this as lower volume. So the pot acts as the volume knob.
Same thing with the tone knob. If you combine a pot and a capacitor with the capacitor going to ground, you get a low-pass filter, meaning a circuit that allows low frequencies to pass through but blocks high frequencies. The combination of the values of the capacitor and the resistor determines the frequencies which the filter sees as "high" and those it sees as "low". As you turn the pot, the filter sees more and more frequencies as high, and so it allows fewer of them to pass through. Hence, the guitar's output signal contains fewer and fewer high frequencies, and boom: tone knob. Here's a simple circuit diagram, and it's exactly what's in my guitar---except for not showing the volume and pickup switch, it's not oversimplified at all:
The (very) basic jist of a capacitor is that it can "store" current, but it takes some time to charge up and down. When it's charged down, a capacitor acts more-or-less like a wire, and current passes through it with no problem. Once it's charged up, though, it won't let any current through (it's at "capacity", if you will); in that state, it's like a broken wire. High frequencies alternate so rapidly that they don't give the capacitor a chance to charge up, so they pass right through it; low frequencies, however, charge up the capacitor before they get through it, and so they're blocked.
So as you can see from the diagram, if the pot's resistance is low enough to allow the signal to head towards ground, the high frequencies will pass through the capacitor and escape, while the low frequencies still can't get by the cap and have to go to the guitar's output. And so you hear the low frequencies but don't hear the high ones. Of course, if the pot's resistance is all the way up, then none of the signal goes towards ground and all of it goes to the output.
You can easily tweak your tone controls by replacing the capacitors with different ones with different values. It's a simple soldering job, capacitors are dirt cheap (like $0.10 cheap) and it's much easier than replacing the pots.
The tone pots are literally the knobs on the front of your guitar that you adjust the tone and volume of your pick ups with.
Edit: Cant explain in any great technical detail; aside from to say that they allow you to control the low power analogue signal of your pickups.
In the case of the Tone pots these allow you to control output from specific pick-ups with the volume pot controlling overall volume.
The toggle switch allows you to choose individual/combinations of pickups; with the tone pots acting upon those selected.
Depending on the type/configuration of the guitar you have, you may have a tone pot for each pickup (this gives you most tone control); or you may have one tone pot which controls the overall tone of whatever configuration is selected via he toggle switch.