Can somebody tell me what exactly a pre-amp is, what it does, and how it works?
Do you need to buy an amp head for a pre-amp to do anything?
A preamp takes care of signal processing before the overall signal is amplified by the amp itself.

Most guitar amps are actually pre-amps and amps in one unit. The only time that becomes an issue is when you're building a rack system.
Hi, I'm Peter
it takes a weak signal such as a microphone or guitar and brings it up to a line level signal. they can also include EQ and gain controls. then that signal goes into a poweramp that amplifies the signal for however loud it was designed for.

this should be in the guitar gear and accessories forum, unless you wanna build a preamp.
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a pre-amp shapes your tone. a amp head is seperated in two parts, pre-amp and power-amp.
the power-amp BASICALLY increases the volume.
You could also add another preamp to an amp head to reshape the tone or add gain etc
-Ibanez SZ-520QM (D-Sonic/Air Norton)
-Ibanez RG-370
-ESP ltd B-55
-Engl E530 + 930/60 Poweramp