Explain digital and analogue control signals and their applications

In simple terms, analogue is driven by a mechanical means such as a cable and springs where as digital is electronic. A pressure gauge with an arm is analogue due to the movement of the arm by pressure pushing against a spring. A pressure gauge with an l.e.d is digital because pressure is pushing against a plate that generates a signal (electric current) then displayed on the L.E.D.

also when they said input/output digital it mean on/off, analog it is variable

Whether the conrol is mechnical or electrical has nothing to do with it. Anything that has a continuous output and can therefore take on any value within the operating range is considered to be analog - so for example the volume control on an old stereo is an analog control, even though it's electronic, in that theoretically you can set the volume for any level between 0 and its max. A digital signal is one which can only take on discrete values - perhaps just "on" and "off" (a light switch is a simple digital control device), or perhaps with a wide variety of discrete levels , such as on a modern stereo with a volume control that you can click between, say, 0 and 100. While there are a lot of choices in settings, you can't set the volume to, say 3.14159, as that is not one of the discrete settings allowed.

The discrete values that a digital device work with has the aqdvantage of simplifying signal processing and display, and helps eliminate noise in systems since noise level is below the threshold of an allowable digital signal and can therefore be ignored by the processor.

It appears we are both correct. In the example I provided the example of an analogue gauge that "Analog pressure gauges are mechanical devices" and digital guages are "Digital pressure gauges use electronic components to convert applied pressure into usable signals" qouted from Digital Gauge On GlobalSpec (http://sensors-transducers.globalspec.com/Industrial-Directory/digital_gauge). Sometimes there are more than one correct answer. In reality all three posts are correct.

Not to split hairs, but your original post said "analogue is driven by a mechanical means such as a cable and springs where as digital is electronic. " That is not correct. Yes, the example you gave is no doubt analog, ands it happens to be mechanical. That does not mean that therefore all analog devices are mechanical nor that all electronic devices are digital. Digital control only became possible after the advent of low-cost integrated circuits, in the 1960s. With very few exceptions any electronic design that predates the IC was analog (yes, there were exceptions, such as early computers like ENIAC that ran on vacuum tubes, but these were clearly not the norm).