Pulse oximetry is a noninvasive method to rapidly measure arterial oxygen saturation using light absorption. It uses red and infrared light passed through tissue to determine oxygenated and deoxygenated hemoglobin levels. Readings are affected by various patient factors like low perfusion, skin pigmentation, abnormal hemoglobins, and motion artifact. While pulse oximetry provides continuous monitoring of oxygen saturation, its readings must be interpreted carefully due to potential sources of error.