I'll qualify this up front: Shock tuning is a hugely complicated science and art. Top teams employ special engineers and data analysts to derive accurate baseline settings. What's "in vogue" this year may not pan out the next, especially as tire technology advances. I'm glossing over many issues here but it's still probably a valuable write-up if you're not a suspension geek.
Stating that, and hugely simplifying things, here's where I'd start:
Shock tuning is primarily about two things: transitional vehicle balance ("handling") and controlling the wheel/tire combo over surface undulations. In both conditions, shocks act as "transitional springs" which absorb load depending upon *velocity* (or time, depending upon how your brain works), whereas actual springs bear load depending upon *position*. Together, shock and spring stiffness (and swaybars) generate an overall roll stiffness picture, which impacts the vehicle's "balance" at each time slice because tires don't respond linearly to vertical load (which we'll duck at the moment). As roll stiffness increases on one end of the car, it's asked to absorb more of the weight transferred while cornering; since the tires don't respond linearly, that end of the car "gives up." Add roll stiffness in the front and you increase the tendency to understeer; add it in the rear and you increase the tendency to oversteer.
We'll boil "bump" dampening down and say it's primarily limited by surface types; the rougher the surface the less bump one can run, as the vehicle will be bounced up into the air instead of just the (unsprung) tire and wheel assembly.
Which leaves us rebound. Assuming you're at all in the right ballpark, which some cars aren't, you're "critically dampened." This means that the total resistance offered by the shock is enough to control the compressed spring as it attempts to expand, without oscillating (much). For example, if you were to smash a wrecking ball onto the front of the viper and then lift it quickly, the front of the car would be pushed down quite far. Once the ball is released the front of the car would try to lift back up, and without a shock it would pass its typical ride height and then "pogo" up and down for awhile. A critically dampened setup would see the front end rise up to its normal ride height, not overshooting. This is all well and good, so let's move on...
So, assuming you're at all setup right, what can rebound dampening adjustments do for you? Simply put, it can adjust the balance of your car as you transition into and out of your steady-state cornering attitude by altering the transient roll stiffness of a particular end. For instance: as you're turning into a corner it takes a little while for the side forces to build up and for the vehicle to roll over onto its springs (as far as it will given some amount of side force, say 1G). When you finally get the car rolled over (and assuming a completely flat surface) you'll reach the mechanical roll stiffness afforded by the springs (and swaybars). At this point (steady state), shocks have *zero* impact upon the vehicle's handling. But on the way there, they are everything (and how often are you perfectly steady state?!).
Shocks offer resistance, and that resistance is speed related. Shocks are dyno'd with piston velocity on one axis and resistance on the other. When there's no movement, there's no resistance. No effect.
So, the magic happens 1)when there's movement (the wheel going up or down, i.e. the vehicle rolling upon its suspension) and 2) you've not yet reached steady-state cornering.
Say your car understeers at steady state. You could change this by tweaking with springs, swaybars, tire sizes, etc, but you actually like this because it's safe. What you're really looking for is "crisper turn in," but you don't really want to muck with the steady-state performance. This you can do via shock tuning, as "turn in" is simply another way to say "the transition into steady state cornering." We know that shocks add resistance during transitional movement, and that impacts the overall roll stiffness at a given point, so we can use that to our advantage.
"Crisper turn in" translated a bit really means "more rear transitional roll stiffness" - we're asking the rear tires to absorb the weight transfer *as the car rolls toward its final attitude* (that attitude only affected by the ultimate spring and swaybar stiffness). To get more transitional roll stiffness we could add rear bump or rebound, but since we're already dialed in (and are limited by) bump in this case, we have to add rebound. Bear in mind that braking and acceleration forces also come into play and impact things, so you may need to account for weight transfer fore and aft as well as side to side, that's when things get really neat. Under braking (while transitioning into a corner), front compression and rear rebound impact balance; under acceleration front rebound and rear bump impact balance.
Once the car's roll stops rolling and reaches steady state, the shocks do nothing (unless the surface changes).
Make sense? Use springs and swaybars (or CG, roll centers, tire sizes, etc.) to impact the ultimate steady state oversteer/understeer balance of a vehicle. Use shocks to impact the transitional balance (slaloms, turn in, track out, etc.). This balance has to be weighted against the need to use shocks to control the unsprung weight against surface imperfections, to cope with aero, etc. There's no single answer, and ultimatly it comes down to driver confidence and feel. Generally, higher shock stiffness "tightens up the car" and makes it faster to react, literally.
As with anything, you can screw it up too, and set shocks so stiff that they literally don't allow the springs to expand and "weight jack" the car after bumps, etc.
Typically, "good shocks" have more adjustability and less "stiction" in the mechanism itself. Today's Moton's feel far more supple than yesterday's hot setup, primarily because of this.
OK so that wasn't so short, but it's probably more than you wanted. Shock tuning and dynamic vehicle performance is widely misunderstood or miscommunicated, even by professionals. One person's experience may butt heads with another's engineering background. In general, what I've written above should be sound, but if people want to add (or ask for) more technical bits please do so, and if you want more plain "what if" cases then that's cool as well. I've glossed over many items and made a number of assumptions so the system makes sense as a whole, to an educated but inexperienced reader.
When in doubt, just add HP
