Hi-Fi loudspeakers work by converting electrical signals into sound waves through the interaction of various components such as drivers, enclosures, and crossovers. When an electrical signal is sent to the speaker, the voice coil within the driver interacts with a magnetic field, causing it to move back and forth. This motion vibrates the driver cone, producing sound waves that correspond to the original electrical signal. Enclosures help control and enhance these sound waves for better performance.