A quick and dirty search came up with this link:
http://engknowledge.com/power_supply_design.aspxIn a nutshell, here's what's going on. The top image is what comes out of your wall. The green line in the middle is 0. We run that through a series of diodes to make all of the voltages positive, causing the current to continually flow in the same direction. That's the second image.
Next, we put a capacitor across the load. Once the capacitor gets charged up, it runs the device (in this case, your computer) whenever the voltage from the wall is below a certain level. That's the purple line on the third image. Finally we put on voltage regulators, which basically protect the device from the spikes and dips that come along the line provided by your imperfect electric company.
If you'll look at the purple line again, you'll see it's wobbling up and down between the peak voltage, and somewhere in the curve a little bit below that. Whenever the purple line is sloping down, that's when the capacitor is running your computer. When the purple line is following the yellow power signal up, the capacitor is charging while the electrical outlet is powering your device. When you pull the plug or turn your machine off, there is still electricity stored in that capacitor. When it falls below a certain level, the capacitor can't supply enough voltage to run your machine, but it can still discharge and damage components elsewhere in the network.
The chance for that to happen is pretty small, but Khross thinks it's high enough that he wants a switch to cut off his computer from that capacitor. Considering that such switches are cheap, and computers generally cost over a thousand dollars, Khross is perfectly reasonable to ask for one.
Now, onto capacitor aging:
http://www.johansondielectrics.com/technical-notes/general/ceramic-capacitor-aging-made-simple.htmlI wouldn't particularly worry about this for a power supply. If you take a look back up at the graphs I posted, the capacitor is determining how far down that purple line dips before it hits the yellow line. That's the ripple voltage Khross referred to on the first page. We can't actually make a perfectly flat line. The graph you're looking at is highly exaggerated, and it's meant to provide a concept of what's going on. Ripple voltage is tiny.
As your capacitor ages and the dielectric degrades (not all capacitors experience this), the capacitance value goes down. As that happens, that purple line gets steeper. It doesn't make it as far across before it hits the yellow line and starts charging back up. In other words, the voltage ripple gets bigger.
Let's assume that losing 1% capacitance increases your ripple voltage by 1% (this is incorrect, but I don't have a better figure to pull out of my ***). Suppose your power supply loses 10% capacitance due to capacitor aging. The ripple voltage increases from 0.000010V to 0.000011V. Let's say you're running a iPhone that probably takes a 5V power supply (based on running off a USB port). That means you're old, shitty power supply is providing power between 4.99989V and 5.000011V.
In other words, capacitor aging doesn't totally destroy your power supply and the machine you run off of it. Furthermore, it's the dielectric that's degrading, and not the entire capacitor. There is a minimum value that your capacitor can not fall below.