A standalone preamplifier should be the final component in the chain before an audio signal is routed to a main, or power, amplifier. If you're playing guitar or another musical instrument, it should be connected to the output of any other effects units you're using to treat your signal before amplification. If you're using a preamp at home with AV equipment, the audio signal should be routed from the source unit, a CD player or a turntable for example, to the preamp and then on to the main amplifier. A preamplifier calibrates the audio signal from a low-level source input such as a microphone, pick-up or turntable and prepares it to processed by a traditional amplifier. It also adds controls such as tone and equalization or acts as a switching device between various source inputs.
An amplifier, or power amplifier, takes the signal produced by the preamplifier and translates it to a signal that can be relayed through a set of speakers or headphones. A main amplifier increases the power and sound of the signal provided by the preamplifier before the final result is heard.
Many amplifiers, whether used by musicians or in the home, contain a preamplifier and a power amplifier within the same unit, which is why a distinction is often not made between the two.