What does a turbo do?

Engines require both fuel and air for proper combustion. To simply dump more and more fuel into an engine would be pointless (in fact excess fuel burning is what creates the black smoke from diesel engines), there is a specific fuel to air ratio for optimum power/performance. A Turbo is designed so that more air can be put into the engine without having to make a gigantic engine block that would weigh down the vehicle and make the increase in power then, pointless. A system involves the turbo itself as well as a piping system. The pipes direct exhausted gasses to the turbo where they first encounter the turbine wheel (one of the sets of fins within the housing). This "wheel" or fan is connected directly to the compressor wheel, and thus it then begins to spin also. As the compressor wheel increases its rotational speed, the causes more and more air to be drawn into the chamber. The then compressed air sent to the intake system of the engine and the process starts all over again. So by pushing more and more air into the small chamber, the air is compressed before it is forced into the intake. Because energy is neither created nor destroyed, the pressure in the entire system will increase as the turbo builds pressure. To prevent damage, the piping system has sort of a blow off valve installed that will release pressure if it becomes to great within the engine.


http://www.jhdiesel.com

The above image shows a turbocharger that has been taken apart and all the internal components (the wheels and gears that all spin) can be seen.


The following link show a leaf blower being used as a make-shift turbo. The dynamometer measures and displays the horsepower and shows an obvious increase from the leaf blower forcing more air into the intake. The makers take it an extra step and add nitrous, but that's an entirely separate aftermarket component.
Leaf Blower Turbo