Twisted pairs and differential signals

In a noisy environment, twisted-pair wiring is used in hope to achieve noise immunity. The thinking is that noise is cancelled as the common mode. People sometimes are surprised to find that twisted-pair wiring does not have the expected benefit. A lot times people simply twist the signals with ground wires. For the twisted pairs to be effective, the signals have to be balanced. When the noise is coupled to the signal lines, the noise voltage is depended on the signal source impedance. The signal impedance is likely to be larger than the ground wire, so unequal amount of noise is coupled to the signal and the ground wire and they are not cancelled out. Therefore, it is important to convert single-ended signal into balanced differential signals before sending through long twisted pair wires.