Frequency Modulation (FM): A modulation technique in which the carrier frequency is shifted by an amount proportional to the value of the modulating signal. The amplitude of the carrier signals remains constant. The deviation of the carrier frequency determines the signal content of the message. Commercial TV and FM radio use this technique, which is much less sensitive to noise and interference than is amplitude modulation (AM). In the world of modems, digital bit streams can be transmitted over analog facilities through this same technique, whereby a 0 bit might be represented by a high-frequency sine wave (or set of sine waves) and a 1 bit by a low-frequency sine wave (or set of sine waves).
In the image below, notice the top line represents the audio signal being transmitted.
The red line represents Amplitude Modulation with the frequency (space between waves) remaining constant with each modulation of the signal. The deviation of the amplitude determines the message.
The blue line represents Frequency Modulation with the amplitude (height of the waves) remaining constant with each modulation of the signal. The deviation of the frequency determines the message.
Image Source: http://en.wikipedia.org/wiki/Amplitude_modulation
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