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Air springs are the most common in most modern shocks except for downhill specific shocks. The coil springs tend to weight more so they're not so desirable on bikes you want to pedal. The air spring offers more fine tuning ability than the coil too.
Within an air spring are 2 air chambers; the positive air chamber works to resist the weight of the rider, as the shock compresses so does the air in the positive chamber which creates the spring. The negative chamber work in the opposite way to the positive which helps the shock push into its travel against the positive air. Negative air makes the shock respond more effectively over small bumps making the ride smoother.
The damper body acts as the seal for the air spring so it's really important to keep this clean and scratch free. It also houses the damper fluid which is what controls the compression and rebound of the shock. The damper adjustments are controlled by external dials which control how freely the fluid moves between the damper ports. Having the correct settings for your shock will ensure the shock is working to its optimum for your weights and riding style and maintains rear wheel traction through bumps and corners. Within the damper you'll also find the IFP (internal floating piston) which is what separates the nitrogen from the damper fluid.
It's important to get the rebound of your shock set up correctly because if it's too slow, your shock won't have rebounded fully before the next impact which will make the back end of your bike feel harsh and send impact through your feet. Too much rebound and you'll get bucked out of every compression and feel like you're going OTB. Having the rebound set correctly will increase traction through the rear wheel.