Storage Basics: SCSI Part II Page 3
Termination is an important topic for SCSI, as without the correct termination the entire SCSI bus will most probably be inoperative. In some cases the SCSI devices on the bus may still operate, but you will experience seemingly random problems.
The basic purpose of termination is to prevent the data signals that reach the end of the bus from reflecting back down the bus and then affecting other signals. There are two basic types of termination, passive and active. Passive termination, the method used by the lower performance SCSI standards, uses a group of resistors to "soak up" the signals on the SCSI bus. A more advanced system, active termination, uses a group of voltage regulators to deal with the signals. This results in a more defined level of control, which is preferred and in some cases required on some of the higher performance SCSI standards.
In most cases, SCSI termination is set on the host adapter. If you are only using internal SCSI devices, this is correct, but if you also have external devices then the termination must be removed from the SCSI host adapter and placed on the last device in the chain. A SCSI bus can only have two termination points -- one at each end of the physical bus.