Hertz is a shorthand for 'cycles per second' and can be applied to many recurrent things.

http://www.audiovideo101.com/dictionary/hz.asp

There is an important theorem that states a digital sampling system can store all the data needed to restore an arbitrary waveform if (1) the waveform has no frequency components above 'N' and (2) it is sampled at a rate of at least N x 2.

This is where 'sample rate' becomes important.

EDIT:

I should answer the question is guess:

Quote:
Note that our example is greatly exaggerated to make the demonstration more clear.


This is no joke - in real life it works a lot better than the picture might indicate. Also, as noted in discussion above, there is a tremendous amount of variation in quality of implementation. And for purposes of simplification toms' has omitted a few steps. See the link above for a good accurate rundown on digital recording.

[This message has been edited by charlie (edited November 14, 2002).]
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Charlie