Location
The barometric damper is found in the flue pipe downstream from the furnace proper. It is basically a weighted flap that acts as a mixing valve, adjusting the dilution of air and counteracting the effects of any drafts from the chimney.
Function
The barometric damper isolates the burner from the changes in air pressure and temperature at the chimney exit. The damper does this by pulling already heated room air into the exhaust.
Efficiency
The barometric damper helps a furnace or stove work more efficiently since a steady draft is desired over constant changes in airflow. This means less heat will be sucked up the flue when an oil furnace is on or off and the fuel in a coal or wood stove may burn more steadily and for a longer time.