Howstuffworks.com is probably my favorite site for just about anything when it comes to finding out how something works.  
This is a great read. 
Credit to howstuffworks.com 
HOW WEIGHT DISTRIBUTION WORKS!
Most people who've driven a trailer have experienced at least a few heart-pounding moments when their trailers started to sway and they worried they might lose control of the vehicles. One way to help ensure disaster won't strike, especially if you're pulling a very large load, is to use a weight distribution system.
To understand how a weight distribution system works, we need to familiarize ourselves with two terms. The first one is gross trailer weight (or GTW), which, as you can probably guess, describes the total weight of the trailer, including cargo, fuel and anything else you've got in there. The second term is tongue weight. Tongue weight is the portion of the load (generally between about 10 and 15 percent of the gross trailer weight) that's far enough forward in the trailer that it presses down on the hitch. Tongue weight (orTW) also includes any weight that's behind the rear axle of the towing vehicle. So if you plan on loading up the trunk, you'll need to factor that in.
Weight distribution hitches can help prevent those dangerous conditions and improve a vehicle's ability toturn, brake and steer, especially in the case of large loads, which can be hard to maneuver in a safe and controlled manner. On the next page, we'll take a closer look at how this is possible.Having too much tongue weight in relation to gross trailer weight can cause the hitch of the trailer -- and the rear axle of the tow vehicle -- to dive, meaning the front of the trailer will head toward the ground, bringing the front of the towing vehicle off of the ground. Obviously, if your tow vehicle dives too far, such as in situations when you need to brake quickly, you'll loose braking traction and steering control of the wheels on the front axle, which can be very dangerous. The opposite is also true of too little relative tongue weight. In those situations, a trailer will be more prone to sway, and it can swing back and forth out of control. Because of these two factors, you can see why finding the delicate balance between tongue weight and gross trailer weight is so vital.

Purpose of Towing Weight Distribution Systems

We learned on the last page about gross trailer weight and tongue weight and why they're such big factors in towing a trailer. Keep in mind, too, the more weight you add to the equation, the more the situation is exacerbated. While a weight distribution system can't increase the total amount of weight a tow vehicle can haul beyond its maximum capacity, it can improve handling by distributing some of the weight off the tongue and onto the other axles -- thereby safely getting you closer to that maximum mark.
towing weight distribution system

The difference between using a weight distribution system and going without is clearly illustrated here.
To understand this, keep in mind what we read on the last page concerning too much or too little tongue weight. With a weight carrying hitch -- one lacking a weight distribution system -- there needs to be a delicate balance struck between how much weight is on the tongue, or your towing excursion could end in disaster.
You still need to carefully keep the same ratios of tongue weight andgross trailer weight in mind with a weight distribution hitch, but when you have a heavier load you have to consider how much more tongue weight that actually entails. A weight distribution system is important because it eases the situation by spreading some of that increased tongue weight off the rear axle of the tow vehicle and onto the front axle, as well as the axle (or axles) of the trailer. With that leverage, everything balances out and driving performance increases dramatically. Also, don't forget the tow vehicle's axles each have a gross axle weight rating -- adjusting the weight distribution system can help distribute the weight appropriately.
If you're looking to tow a smaller load, generally you can get away with a weight carrying hitch. As the gross trailer weight creeps up on the scales, a weight distribution hitch might start to look a lot more attractive. Usually if your trailer weighs in at more than 50 percent of the towing vehicle's weight, you'll need one of these hitches. Plus, once you reach certain gross trailer weights, a weight distribution system is required by law anyway. So how do you know which one to get? On the next page, we'll delve a little deeper into what you should consider when picking out a weight distribution system.

Choosing Towing Weight Distribution Systems

The most important thing to keep in mind when picking out a weight distribution system is the weight of the load you'll be towing. Weight distribution systems are rated in two ways: the gross trailer weight they can haul, and the tongue weight they can distribute. You want to make sure both of those ratings are above the amount you're looking to tow -- but not too far above it.
For example, if the weight distribution system has a 1,000 pound (454 kilogram) tongue weight capacity but the trailer is loaded with only 300 pounds (136 kilograms) of tongue weight with 50 pounds (23 kilograms) of cargo in the trunk of the towing vehicle, you're about 650 pounds (295 kilograms) under the rating. That can make the distribution unpredictable and dangerous. On the other hand, if the system is rated to 1,000 pounds (454 kilograms) of tongue weight but you're attempting to distribute 1,500 pounds (680 kilograms) of tongue weight, the system won't be able to distribute the weight effectively and you'll also have some serious problems. Keep that infamous rule from "The Price Is Right" in mind when choosing a weight distribution system -- you want to bid the closest without going over.
towing weight distribution system
A towing weight distribution system with added sway control.
A second choice you'll have to make during the selection process is which type of spring bars you want in the system. There are two common basic styles: round or trunnion. Round bars usually offer a little more clearance space for hooking up the trailer, but trunnion bars can increase the system's weight rating. The advantages presented by either round or trunnion bars vary from setup to setup, so it's good to consult with someone who has experience while you're trying to decide.
Another factor to consider when purchasing a weight distribution system is whether you want additional features like sway control. Generally, the systems are naturally less inclined to sway so you can probably hold off on that purchase at first. If you're still experiencing sway (and provided you didn't do a really bad job packing or are driving too fast), then you might want to look into adding a sway control system too. Some systems are two-in-one, with weight distribution systems and sway control systems combined.