how are stereo signals recorded on records and CDs

Really, you need to look it up. Stereo records are quite complex. You really only have one needle and one groove, so stereo records are never really true two chan reproduction. The stereo image is really faked somewhat and illusionary. IIRC, only the left chan. has all the signal. The right chan only has phase diff. from the left. They tried not to put too much info on the right side of the "V" groove because it could really cause distortion in the left chan. of the next goove over.

Thank you for the explaination of the vinyl groove.

I wasn't really expecting a mechanical analogy for redbook CD, just wondering if someone could explain how the 1's and 0's work in general. I know the electrical signal is converted into a digital code, but what I don't know is how the bit packs fit in or if it's a single string of data or two parallel stings.

I read somewhere about a piece of equipment (maybe the PS Audio DAC?) that seperated the signal into seperate channel at transport and actually had seperate DACs for each channel. It made me wonder at what point, if ever, the two channels were put together or completely seperate.

Make any sense?

The groove is like a valley - each side of the valley represents one channel. The stylus vibrates in two orthogonal directions in response to the signal on each side. A moving magnet at the other end of the stylus is detected by two coils to give two channels (stereo)

Vinyl Groove

There are other variations like Moving Coil but essentially they operate in a mechanically similar way. There are of course more details such as RIAA equalization but the above explains the principles.

As for a redbook CD - there is NO mechanical analogy. Pits are read from a shiny spinning disc and translated to a digital signal that includes encrypted two channel sound sampled at 44.1 Khz. The encryption is Solomon-Reed interleave and allows for robust data error recovery by including about 10% extra redundant info that can be used to completely recover the actual data even given that any physical medium will get scratched and damaged.