What is the difference between balanced (XLR) and unbalanced (RCA) connections?
XLR cables use differential designs and, as their name implies, they only let differences pass. They use two signal paths, inverted (negative) and non-inverted (positive), plus a ground. The inverted and non-inverted signals are exact reflections of each other, so where one has a peak, the other has a trough. This differential design helps cancel any noise injected in the line and may provide better sound than RCA connections.
Single-ended signals use a single conductor in the cable which typically also uses a shield wire to make a ground connection. The shield cannot be 100% effective, so noise picked up by the signal conductor becomes forever part of the audio signal is amplified through the signal path.