When we refer to channels on a xWDM system, whether Coarse or Dense WDM, we are talking about the number of signals (wavelengths) that can be transmitted on a fiber. A WDM system separates a single fiber into multiple lanes of light. I.e., for an 8 channel CWDM system, 8 signal paths are available between site A and Site B, typically using 2 optical fibers (one transmit and one receive). The device that separates the fiber into multiple light paths and provides the user access (via optical connectors) is the optical multiplexer/demultiplexer. A different frequency specific optical signal is required for each of the wavelength paths. A signal is inserted into the Multiplexer at one end and removed from the fiber at the far end using a Demultiplers. These wavelength signals can be generated by transponders or a WDM compliant transceivers (such as SFP/GBIC/XENPACK/ETCs).
WDM systems typically operate over singlemode fiber.
Let me know if this helps and if you have additional questions.
Tom
