Kerry Wong did a teardown of an ATVR-1000D automatic AC voltage regulator and discussed how different types of AC regulators work:
The ATVR-1000D utilizes a motor to drive the wiper of a autotransformer (Variac), the servo motor can be driven in either direction depending on the output from the OpAmp (LM324) based comparator. Comparing to a voltage regulator that uses relays for tap-switching, this type of servo-driven voltage regulator has several advantages. It offers continuous voltage adjustments as opposed to the limited discrete steps offered by relay-switching regulators. Also the output waveform is continuous.
See the full post on his blog.
Check out the video after the break.