I'm with phenigma. I did a lot of research on this a while back and wrote it down for my green renovation blog. Maybe too much information, but...
Info on dimmers and lighting types:
A filament lightbulb works as electricity flows through a thin wire, causing it to heat up and glow. The hotter a wire gets, the more it resists the flow of electricity. So a cool light bulb draws a lot of current when you first throw the switch, then the current slows and stabilizes when the bulb reaches operating temperature. This initial current rush explains why bulbs typically burn out at the moment you hit the switch. Electronic dimmers like those used in home automation systems work by rapidly interrupting the flow of electricity. This reduces the current through the bulb and dims the light.
A fluorescent light is basically electric current flowing through a gas. Unlike a filament bulb, the gas initially presents high resistance to the flow of electricity, but the resistance goes down when the bulb lights. The decreased resistance allows more current to flow, and the increased current through the gas decreases resistance even more. To prevent a runaway condition that could trip your circuit breaker, a fluorescent light employs a “ballast” to regulate current flow. The ballast is essentially a transformer that uses coils of wire to establish a magnetic field. It takes energy to create the field, and that creates just enough resistance to establish the proper electrical flow through the light.
A low voltage light normally uses a transformer to reduce your 120V household current to 12V. As 60Hz alternating current flows through the primary coil of the transformer, it causes an alternating magnetic field. This fluctuating magnetic field induces electric current in the secondary coil of the transformer. The voltage is reduced to the desired level by using fewer windings in the secondary coil.
Electronic dimmers have difficulty driving inductive loads like ballasts and transformers. The problem is that ballasts and transformers are tuned to the smooth 60Hz alternating current found in your home. The dimmer, by chopping up the flow of current, plays havoc with the magnetic field in a ballast or transformer. Insteon tech support told me their dimmers might work with some transformers, but others will cause dangerous overheating and/or potentially destroy the equipment.
