How Heat Blankets Work

Space Blankets work by reflecting the heat lost from your body back onto you.  In other words, the space blanket helps regulate your body's temperature by conserving the infrared energy.  Heat Blankets keep people warm by reflecting back both evaporation and radiation heat loss. 
One reason it is important to stay dry in cold conditions is because of the amount of energy required to evaporate moisture.  Evaporation from on the body can cause a drastic temperature change because it is using the body's energy to change from a liquid to a gas.  In this case a space blanket will slow down the rate of evaporation and give the body time to recover. 

For radiation, our bodies lose heat by simply emitting to the outside air which is usually colder than our internal temperature.  This is where the space blankets are really helpful,  space blankets can reflect about eighty percent of the heat lost back to the body. 


http://www.yourhome.gov.au/sites/prod.yourhome.gov.au/files/images/PD-Insul-Reflective_fmt.png