Source : Free On-Line Dictionary of Computing

Manchester encoding
     
         A method of transmitting bits which
        enables the receiver to easily synchronise with the sender.
     
        A simple way of signalling bits might be to transmit a high
        voltage for some period for a 1-bit and a low voltage for a 0
        bit:
     
         Bits Sent:             1     1     0     0
     
         Signal:      High    ___________
        	      Low                |___________
     
         Time: ->            .     .     .     .     .
     
        However, when several identical bits are sent in succession,
        this provides no information to the receiver about when each
        bit starts and stops.
     
        Manchester encoding splits each bit period into two, and
        ensures that there is always a transition between the signal
        levels in the middle of each bit.  This allows the receiver to
        synchronise with the sender.
     
        In normal Manchester encoding, a 1-bit is transmitted with a
        high voltage in the first period, and a low voltage in the
        second, and vice verse for the 0 bit:
     
         Bits Sent:             1     1     0     0
     
         Signal:      High    __    __       __    __
        	      Low       |__|  |_____|  |__|
     
         Time: ->            .  '  .  '  .  '  .  '  .
     
        In Differential Manchester encoding, a 1-bit is indicated by
        making the first half of the signal equal to the last half of
        the previous bit's signal and a 0-bit is indicated by making
        the first half of the signal opposite to the last half of the
        previous bit's signal.  That is, a zero bit is indicated by a
        transition at the beginning of the bit.
     
        Like normal Manchester encoding, there is always a transition
        in the middle of the transmission of the bit.
     
               Differential Manchester Encoding
     
         Bits Sent:            1     1    0     0
     
         Signal:      High  ____       __    __    __
        	      Low       |_____|  |__|  |__|
     
         Time: ->            .  '  .  '  .  '  .  '  .
     
        With each bit period half as long, twice as much {bandwidth}
        is required when using either of the Manchester encoding
        schemes.
     
        (1995-11-23)