Saddle pads, half pads and blankets come in a huge variety of shapes, sizes, colours and patterns. Basically, though, they all have the same purpose - to protect the horse's back and withers, absorb sweat and act as a cushion for more comfortable riding.
It's not wise to rely on a saddle pad to make up for a bad-fitting saddle, but the right "corrective" saddle pad (especially a wool or sheepskin pad) can definitely help in this respect if all else fails.
The shape of the horse's back and withers, the style of the saddle to be used, and the activity to be practiced are all things to take into account when choosing a saddle pad.
Saddle pads should protrude for at least an inch or so around the edge of the saddle, and shouldn't rub on the horse's withers.
The most popular material for saddle pads is sheepskin or a synthetic equivalent, but woollen felt is also common because of its insulating and moisture absorbing qualities. Foam is used usually in thin pads, but is not as breathable as natural fibres. Some pads have gel layers or inserts, good for cushioning sensitive spots, while others have a neoprene underlayer which is very durable and is anti-slip.