2 Way Light Switch
Assume that, with the switch up, terminals 1 and 3 are connected as shown above. If the switch is down, then terminals 2 and 3 are connected. You can see (if you trace through the wires and the switches) that in the previous figure, the light is off. You can also see that if you flip either switch, the light will turn on. And if you flip either switch again, the light will turn off. It is actually a very simple arrangement once you see it all exposed like this!
There are several other ways to wire three-way switches to a light. For example, the power from the fuse box could come in at the light fixture and there could be two switches in series running from there. Or power can enter at the fixture and then two switches can be arranged in parallel from the light.