A modulator combines data with a high frequency carrier signal. The data information is encoded by controling the amplitude, frequency, and/or phase characteristics of the RF signal.
The simplest modulators directly control the frequency (FM) or amplitude (AM) of a Voltage Controlled Oscillator (VCO). Most analog systems use this kind of modulator.
The simplest digital systems (BPSK, FSK) use a mixer to combine a single data stream with the carrier signal. The most common implementation is a mixer, though a vector modulator can be used either by inputting the same data into both the I and Q data ports, or by using just one data port.
More complex digital modulation schemes (QPSK, GMSK, n-ary ) use 2 orthogonal data streams - called I or "in-phase" and Q or "Quadrature" - that must be combined with the carrier. This requires the use of 2 matched mixers, and is most commonly implemented as an IC. A phase modulator can only vary the phase of the data streams, and is useful for QPSK and GMSK modulation. True vector modulators can vary the amplitude as well as the phase of the data, and are needed for n-ary modulation.