Switches are just a flavor of a bridge.
Bridges sit between segments and only pass traffic if it recognizes that the destination (MAC) address is on another segment. If it sees a MAC that it doens't know, it floods the frame out all ports except the one that sourced the frame.
Each segment operates as an independent broadcast domain, so what a switch / bridge does is break up what would be one large collision domain (like back in the "hub days") into smaller more manageble collision domains.
Switch / bridge operation is also necessary to support full duplex operation (since all hosts can have a "private" collision domain i.e., one host per port).
Check out the following link. It will cover switch / bridge operation in more detail.
http://www.cisco.com/univercd/cc/td/doc/cisintwk/ito_doc/index.htm
This is the online version of Cisco's Inter-Networking Guide, which is also a very large (and expensive) book. If you need to find it in the future, just Google for "Internetworking" and it's always / usually at the top of the list.
Good Luck
Scott
