If you've never seen a theremin, you're not missing too much, but it is legit kind of cool. First, just take a goosey gander at one. It looks like a rectangle with a metal loop on one side and another metal bar sticking straight up on the other side. you're probably wondering how this thing manages to do anything other than look like some kind of radio.
You nailed it, because that's kind of what it is. It's like a radio transmitter and receiver all in one. In order to make it make noises that can be manipulated into resembling music, you stick your hand inside the generated field and move it around. It's science and stuff, you know... like that one class we doodled pictures in all year.
This thing gained enough popularity over the years to barely poke it's head out of the nerd cave and get enough visibility that some higher profile companies even started making them.
Yep, even Moog has made one. Does that lend it any more street-cred? About as much as if Ibanez started making accordians. Which is to say, 'no.' But don't get me wrong, you've got to at least see a video of someone playing it, so when some goofy nerd guy says "Hey, have you ever heard of a theremin?" you can be like "Yeah, bro, of course, duh." But don't admit that was the first time you learned how to pronounce it.
You can watch this video of this guy playing Over the Rainbow on one, or just open any video of a cat sitting on a fence shrieking all night.
If you listened correctly without headphones, your dog probably started howling somewhere in the house.
So the way it works is witchcraft. You don't even touch it. The loopty-loop antenna controls the volume and the vertical one controls the pitch. It's invention was funded by the Soviet government in 1920, where this physicist named Lev Sergeevich Termen (Theremin) was doing research with proximity sensors.
He eventually bailed on Russia after their civil war and got a patent in the United States. This is how most cool toys make their way to the market. They start out as top secret classified military projects for mass surveillance, the technology gets perfected, and bam, all of the sudden we're all buying Furby's for Christmas. They don't even have to bug our houses any more, we do it to ourselves!
I'm guessing the Theremin manufacturing blueprints are in the public domain at this point, because you can buy kits to build your own, or go to Radio Shack and buy the parts following this chart:
If you follow the blue portion of the image, that's the vertical rod where your hand's distance from the rod changes the pitch by sweeping a band-pass filter around. The looped rod is the yellow portion on the image, where you control the volume by manipulating a low-pass filter's threshold frequency.