Taken from -
http://www.cannondownriggers.com/site/html/htmlsite/topten.htm
Generally speaking, a hard bottom will be indicated with a thicker (top-to-bottom) contour line because it reflects most of a transducer\'s sound pulse. A soft, mucky bottom will absorb sound and return a weaker echo, resulting in a thinner contour line. However, a feature Bottom Line® calls GrayScale makes it easier to see the difference between hard and soft bottoms. All Bottom Line units display GrayScale to indicate very strong reflections from the bottom. The thicker (top-to-bottom) the checkering, the harder the bottom.
Have a look at the link it also explains how a fish finder works.
Have a look here as well-
http://www.hammondfishing.com/reports/031003.htm
Marc
[Edited on 4/9/2004 by Marc]