Binaural beats are an auditory illusion where two oscillators, slightly detuned from each other, are played simultaneously with one perceived by each ear. The human brain mixes the audio from each ear, and the listener perceives a "beating" effect that isn't actually there. This is a well-studied phenomenon that has gained the interest of audiologists and neurologists, but it's most famous for being picked up by the alternative medicine community as a way to get high.

There's no doubt that brainwave entrainment audio is a great technology for anyone who is interested in encouraging altered states of consciousness and it certainly can help people to reach deeper states of relaxation than they might normally have access to. I myself will often listen to brainwave entrainment music in order to enhance my practice of meditation. But let’s keep a balanced perspective, put all the marketing hype to one side for a moment and acknowledge that there is no brainwave entrainment technology in this world that can make you meditate like a Zen monk “at the touch of a button”, despite what some might like you to believe. The mind is NOT a machine. It moves through various states of consciousness in an organic way and at a natural pace. We certainly can guide and accelerate that process with the use of brainwave entrainment audio, but we cannot control it with the same sort of specificity and immediacy as you might control the speed of the car you drive.
In 1973, biophysicist Dr. Gerald Oster published a famous article in Scientific American titled “Auditory Beats in the Brain”, which found that when two pure tones of varying frequencies were combined, a third rhythmic beat was created which he called binaural or monaural beats. According to Oster, monaural beats occur when two tones are combined and sent through a loudspeaker, while binaural beats occur when stereo headphones are used to deliver each tone separately to each ear. Oster concluded that monaural beats were a more effective form of brainwave entrainment.

Binaural beats were discovered in 1839 by a German experimenter, H. W. Dove. The human ability to "hear" binaural beats appears to be the result of evolutionary adaptation. Many evolved species can detect binaural beats because of their brain structure. The frequencies at which binaural beats can be detected change depending upon the size of the species' cranium. In the human, binaural beats can be detected when carrier waves are below approximately 1000 Hz (Oster, 1973). Below 1000 Hz the wave length of the signal is longer than the diameter of the human skull. Thus, signals below 1000 Hz curve around the skull by diffraction. The same effect can be observed with radio wave propagation. Lower-frequency (longer wave length) radio waves (such as AM radio) travel around the earth over and in between mountains and structures. Higher-frequency (shorter wave length) radio waves (such as FM radio, TV, and microwaves) travel in a straight line and can't curve around the earth. Mountains and structures block these high-frequency signals. Because frequencies below 1000 Hz curve around the skull, incoming signals below 1000 Hz are heard by both ears. But due to the distance between the ears, the brain "hears" the inputs from the ears as out of phase with each other. As the sound wave passes around the skull, each ear gets a different portion of the wave. It is this waveform phase difference that allows for accurate location of sounds below 1000 Hz(9). Audio direction finding at higher frequencies is less accurate than it is for frequencies below 1000 Hz. At 8000 Hz the pinna (external ear) becomes effective as an aid to localization. In summary it's the ability of the brain to detect a waveform phase difference is what enables it to perceive binaural beats.

Controversies concerning the brain, mind, and consciousness have existed since the early Greek philosophers argued about the nature of the mind-body relationship, and none of these disputes has been resolved. Modern neurologists have located the mind in the brain and have said that consciousness is the result of electrochemical neurological activity. There are, however, growing observations to the contrary. There is no neuro-physiological research which conclusively shows that the higher levels of mind (intuition, insight, creativity, imagination, understanding, thought, reasoning, intent, decision, knowing, will, spirit, or soul) are located in brain tissue (Hunt, 1995). A resolution to the controversies surrounding the higher mind and consciousness and the mind-body problem in general may need to involve an epistemological shift to include extra-rational ways of knowing (de Quincey, 1994) and cannot be comprehended by neuro-chemical brain studies alone. We are in the midst of a revolution focusing on the study of consciousness (Owens, 1995). Penfield, an eminent contemporary neurophysiologist, found that the human mind continued to work in spite of the brain's reduced activity under anesthesia. Brain waves were nearly absent while the mind was just as active as in the waking state. The only difference was in the content of the conscious experience. Following Penfield's work, other researchers have reported awareness in comatose patients (Hunt, 1995) and there is a growing body of evidence which suggests that reduced cortical arousal while maintaining conscious awareness is possible (Fischer, 1971;West 1980; Delmonte, 1984; Goleman 1988; Jevning, Wallace, & Beidenbach, 1992; Wallace, 1986; Mavromatis, 1991). These states are variously referred to as meditative, trance, altered, hypnogogic, hypnotic, and twilight-learning states (Budzynski, 1986). Broadly defined, the various forms of altered states rest on the maintenance of conscious awareness in a physiologically reduced state of arousal marked by parasympathetic dominance (Mavromatis, 1991). Recent physiological studies of highly hypnotizable subjects and adept meditators indicate that maintaining awareness with reduced cortical arousal is indeed possible in selected individuals as a natural ability or as an acquired skill (Sabourin, Cutcomb, Crawford, & Pribram, 1993). More and more scientists are expressing doubts about the neurologists' brain-mind model because it fails to answer so many questions about our ordinary experiences, as well as evading our mystical and spiritual ones. The scientific evidence supporting the phenomenon of remote viewing alone is sufficient to show that mind-consciousness is not a local phenomenon (McMoneagle, 1993).  
In 1984 medical researcher Dr. Gene W. Brockopp published a paper making several conclusions of audio and visual entrainment (AVE). Such conclusions were that hemispheric synchronization caused by AVE is related to increased intellectual functioning, practiced use of AVE overtime leads to a cumulative effect, and AVE may result in the recovery of early childhood experiences.
Most of all, don't feel bad if you fall asleep. Your brain is still receiving many of the benefits of entrainment while you sleep through the audio tracks. In fact, many people report better, more restful sleep when they use brainwave entrainment to help them fall asleep. However, I recommend that you do not go to sleep with your brainwave track set to repeat, as that can be too much stimulation for the brain.

You don’t have to run in order to get a runner’s high. All forms of exercise, including yoga and walking, can ease depression and anxiety by helping the brain release feel-good chemicals and by giving your body a chance to practice dealing with stress. You can go for a quick walk around the block, take the stairs up and down a few flights, or do some stretching exercises like head rolls and shoulder shrugs.

If brainwave entrainment leaves you with unwanted side-effects (see below) or discomfort, you’re probably encouraging a range of brainwaves that are already excessive in some area of your brain. The way around this is to get a brain map to see what your brain’s strengths and weaknesses are, and see what (if any) brainwaves could use some encouragement.