Here is the best explanation I have found (unfortunately I cannot attribute the source):
"I did some experiments with cd's to determine what the heck was happening. Turns out that no magic is involved. What is happening is that the disc takes on a static charge,either through spinning in dry air or just from handling. A spinning, statically charged disc is the definition of an electrostatic generator. This hash-like voltage is impressed on the laser-pickup circuitry. Of course the digital circuit ignores this noise (Well,not entirely. It does effect the jitter rather badly because of power supply noise.), but the noise is now impressed on the power supply and you can see the hash presented to the power-supply rails feeding the analog amplifier, and the cheap chips in most cd-players cannot reject this hash/noise. The better the power-supply and analog cicuitry the less effect this hash/noise and the clarifier has. No power supply built by man can completely eliminate this hash-voltage. It is best to stop it at its source. Hence the Clarifier.
This tweak is actually an ANALOG tweak; the clarifier removes the static charge from the disc reducing the noise impressed on the power supply. Most all cd tweaks affect the player in the analog domain. Remember, the CD itself is indeed a digital storage medium, but the player is essentially an analog device right after conversion. (Hell, even before conversion. Its accuracy of conversion is dependent on a clean voltage from the power supply.)
For an experiment, take your favorite cd and play it. Notice where in the image the high frequency stuff is (bells etc). Now take your disc and place it against a color tv picture tube when on (about 30,000 volts static charge while running). Now play it again. You will notice an enourmous degradation of sound. Now use the Clarifier (or a bulk tape eraser;start the erasor from about 1 foot,bring close to disc,hold near disc for about 20 secs,then move out to 2 foot before turning off,it works the same just not as convienient as the
Clarifier). Now listen again. There should be a readily noticable difference in percieved noise floor and clarity on the highs.
Tweaks like vibration damping, green ink, etc all work because the PLAYER is mostly an analog device; it just gets its initial data from a digital source."