How can people get internet access through their power lines? Wouldn't all the transformers act as low pass filters and destroy your carrier signal? Also, with things being turned on and off constently, wouldn't it be too noisy?
As far as I know this is only done in the power lines in your house. You can superpose you information (internet or what every) onto the 50/60Hz sin wave of mains supply. This can then be taken out again at the other end. The concept is the same as amplitude modulated radio waves, where the information is superposed onto a higher frequency carrier. I would imagine the electronics to do this would be a lot more complex though.
A friend of mine living in Geneva Switzerland subscribed to a music station that was modulated on the power lines I think at about 100 kHz. His antenna was the power cord. At one time I was able to turn lights on and off in my neighbor's house 300 meters away with a special plug-in switch controller.
I think what madmike and Bob S are referring to is the carrier current method. It can be used for broadcasting or sending digital information over power lines. The same principle is used for the X10 home automation system. And yes, transformers will greatly attenuate these signals. However, a bypass can be installed on the transformer to allow the signals to pass.
The system used for internet service is called broadband over power lines (BPL). I don't think noise interfering with the broadband signal is the major cause for concern with this type of system. It's usually the other way around. These systems are sending broadband HF signals over power lines which are not designed to be used in this way. Losses are so great that amplifiers must be installed every 100 to 1000 meters. As a result, there can be leakage of RF signals which can cause interference to radio receivers. This can affect emergency mobile communications and the amateur radio service, or any nearby radio receiver. It's my personal opinion that BPL is a very bad idea. I think there's a lot of money involved and that's what's driving the whole thing. Even the FCC caved in and tried to push this along while trying to hide evidence of how poorly the system works.