Analog audio signals are converted to digital audio packets for transmission over networks. At the receiving end, the digital audio packets are reassembled and converted back to analog audio signals. Packet audio technology divides analog audio into small, evenly sized digital packets for transmission. It uses different methods like silence insertion, error correction, or retransmission to compensate for lost packets depending on the network's characteristics and the application's priority of audio quality or low latency. Packet audio provides benefits like real-time transmission, high quality audio, and low cost communication over networks.