A tone generator (also called a "tone module", "synth module", or just "module") is essentially a synthesizer in a box. It has all the sounds of a normal synthesizer without the keyboard mechanism. This makes for great portability and also allows the manufacturer to produce them at a lower price point. Some tone modules are entry-level in their quality while others are state-of-the-art technology. Any MIDI keyboard can "trigger" the sounds in a tone module. Think of it like a "remote control". Your keyboard (the remote) is playing the sounds located in the tone module. You can then either layer the sound of your keyboard with the module's sound (such as piano and strings) or replace the keyboard's sounds entirely. This is a great way to keep your keyboard up to date. An electronic keyboard becomes obsolete not long after you open the box. While replacing a keyboard every year or two is cost prohibitive for just about everyone, it's not out of the question to add a tone module to your set-up every now and then. These days, a lot of modules are now even expandable which then allows you to add on to the module at a later date instead of replacing it.
A real-life example: I play professionally, and often travel for gigs where I only need a modest synth set-up. I don't even bring a keyboard with me. I ask the venue to supply a MIDI keyboard with weighted keys. I then just bring a little module either in a small rack or even in my suitcase or carry-on. I don't even plug the venue's keyboard into the sound system. I only use my sounds (from the module). It's truly a great way to travel lite.
I know that's probably not your application, but it does illustrate the usefulness of tone modules.
Hope that helps.
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