They contain a fluid and sensitive hairs. Movement of the head causes the fluid in the canals to move which energises or triggers the sensory hairs. The degree of movement of liquid in each canal combines to tell the bird exactly where its head is at any given moment in time. This is very similar to how the human sense of balance works. Naturally, for creatures who move in a fundamentally more fully three dimensional universe than we do a good sense of balance is very important.
Birds start using calls early in their lives, in some species even before they are hatched.
Quail chicks use calls to communicate with each other and their mother from inside their eggs. They are able this way to synchronise their hatching so that they all emerge from the eggs within the space of a couple of hours. Pelican chicks tell their mum if they are too hot or cold from inside the eggs. Chicks also listen to their parents while inside the eggs. This way they come to recognise their parents even before emerging form the eggs.