I don't know if that explanation was too simplistic Gert Here's a You Tube video from the Sauber team on hydraulics
I'll post some info on the various systems which use hydraulics in an F1 car shortly.
Not quite.
The liquid actually makes the part work - it is an essential component of it.
All road car brake systems use hydraulics: http://en.wikipedia.org/wiki/Hydraulic_brake
Over the past two decades, F1 cars have incorporated sophisticated hydraulic systems to handle a range of applications, including ABS and power-assisted braking; clutch, gearbox, and throttle actuation; and controlling engine air inlets and active suspensions.
To fully understand hydraulics here's some further reading starting with the simplest:
http://www.ehow.com/how_7380816_make-simple-hydraulic-system.html
to the scientific:
http://science.howstuffworks.com/transport/engines-equipment/hydraulic1.htm
http://www.grc.nasa.gov/WWW/k-12/WindTunnel/Activities/Pascals_principle.html
Basically, if you have a sealed system full of fluid and use a plunger in a large diameter container to push the fluid through a smaller diameter pipe it will apply greater pressure at the end of the system and/or transferring a small movement into a greater one, thereby using less effort to operate the system. In power steering, as well as being made easier, the movement of the steering wheel is magnified in that the relatively short distance of the rotation of the steering wheel is lengthened the steering arm moved a greater distance.
Hope that helps.
Schumi had 8 in 1994 - that must be pretty close