http://science.howstuffworks.com/question142.htm
"The main problem that must be solved in creating a seismograph is that when the ground shakes, so does the instrument. Therefore, most seismographs involve a large mass of some sort. You could make a very simple seismograph by hanging a large weight from a rope over a table. By attaching a pen to the weight and taping a piece of paper to the table so that the pen can draw on the paper, you could record tremors in the Earth's crust (earthquakes). If you used a roll of paper and a motor that slowly pulled the paper across the table, you would be able to record tremors over time. However, it would take a pretty large tremor for you to see anything. In a real seismograph, levers or electronics are used to magnify the signal so that very small tremors are detectable. A big mechanical seismograph may have a weight attached that weighs 1,000 pounds (450 kg) or more, and it drives a set of levers that significantly magnify the pen's motion."

Basically, a heavy weight is attached to a needle/pen, which moves according to vibrations in the earth. These vibrations are magnified by the weight and the length of the oscillation on the recording media (a paper roll, for example) is attributed to the strength of the vibrations. The frequency and the strength of vibrations change in a typical way right before earthquakes occur, but not enough time beforehand to predict earthquakes. Using three or more seismographs, you can pinpoint the location of an earthquake. Typically, seismographs are located away from roads and other ground-disturbing interference.