The most common use of a expansion tank in The San Francisco bay area is to prevent the T&P valve on a water heater from opening do to thermal expansion. Thermal expansion is caused when could water is heated and expands in a closed system, such as a domestic hot water system with a pressure reducing valve supplying the cold water.
In a domestic hot water system the pressure reducing valve regulates the incoming water pressure allowing water in but not out, creating a closed system. When the water heater heats the water the water expands creating more pressure. When the pressure reaches 150 pounds the T&P Valves open dropping the pressure in the system and making a mess. The expansion tank absorbs the excess pressure when the water is heating preventing the T&P valve from opening.
Technically speaking, an expansion tank is an extra tank used in closed water heating systems made for domestic use to absorb excess water pressure. It is divided in to two parts, one which contains water and is connected to the hot water system. The other side of the tank contains air and helps increase the amount of water pressure. It's actually called a rubber diaphragm, and helps relieve the wear and tear on a plumbing system that may have more demands on it than it can handle. There's a lot more to it than that, which is why you should give us a call if you feel like you need an expansion tank.