The main use for an EG is to vary the volume of a sound, (when used to control a VCA), to reproduce the way natural instruments sound. E.g. a piano sound starting loud when the key is struck, then gradually dieing away. It can also be used to change the timbre of a sound over time, by controlling the cut-off frequency of a VCF.
The most common EGs are ADSR, AD and AR (Attack, Decay, Sustain, Release).
The attack time adjusts the rate at which the envelope will rise to its peak value. This is initiated with a Gate signal.
The Decay adjusts the rate the signal takes to fall to the Sustain level.
The Sustain level adjusts the level that the EG signal will sustain from the end of the Decay time till the end of the Gate signal (i.e. when the key is release).
The Release time adjusts the rate the signal takes to fall from its current level to zero, after the end of the Gate signal (when the key was released).
If a short Trigger signal is used to initiate the EG, there will be no Decay or Sustain portion to the EG signal. The signal will rise to peak level (Attack), then immediately fall from peak to zero at the Release rate.