Referring to primarily audio effects, the term outboard gear becomes slightly convoluted when a modular console allows the interchangeability of processors within a channel strip. The ability to swap in your favourite EQ or microphone pre-amp crosses the line in terms of "in-board gear". Which can never be a bad thing!
There are two methods of introducing outboard gear such as dynamic and time-based effects. One way is via an insert. An insert effect will be placed in series within a channel strip, processing the entirety of a signal at one of few inputs. These inputs are solely determined by the consoles functionality. The other method of introducing outboard gear effects is via auxiliary send and returns. This method copies the signal and routes it to the effect while maintaining the integrity of the original path of signal flow through the channel strip. The copied signal is then typically routed to an exclusive channel strip on the console where you may use all capabilities a typical return track channel strip has to offer. This dual-channel strip method offers far more flexibility in manipulation of a "wet" signal.
It is advised that dynamic processors be used as an insert effect while reserving time-based effects for auxiliary send and returns. Often, 'insert' effects are referred to as being in “series” while auxiliary send and returns are often referred to as “parallel” processing.
Dynamic effects include processors that control and manipulate amplitude such as; compressors, EQs, microphone pre-amplifiers, guitar amplifiers, gate/expander and distortion.
Time-based effects include processors that control frequency and the timing of a signal, also known as phase. These effects include; reverb, delay, pitch-shifting, chorus, flanger and phaser.