You Asked:
How does geo-thermal heating and AC work? — Ed, Monroe, Michigan

Marshall Answered:
Imagine the normal home air conditioner (see How Air Conditioners Work for details). The hot coils are outside trying to dump the heat of compression. The air temperature might be 90 or 100 degrees, so the dumping of heat is not very efficient. If you could somehow submerge those hot coils in cool water rather than hot air, the AC would run a lot more efficiently. This is the basic idea behind a geothermal AC system. Cool water is pumped from a well (or the coils are buried ten feet underground where the temperature of the soil is a stable 60 degrees or so). It saves a lot of money on the AC. If you use a heat pump, you can get the same benefit for heating too. For more info see How do geothermal heat pumps work?