The balance wheel centered in this picture is an old bi-metallic balance wheel. This is a compensating balance, because it compensates for the effects felt by the balance spring as the temperature changes. When the temperature changes, the properties of the (older) balance spring changed, and thus the timekeeping ability of the watch was altered. . Someone who probably was a genius came up the the idea of putting two metals together to form the balance. Steel and brass, metals with different coefficients of expansion were used. When it gets cold, one likes to expand and the other contracts. When it gets warm, the reverse happens. The radius of the balance will change very slightly with cold or hot, therefore changing it's frequency of oscillation, but this change is enough to compensate for the alterations taking place in the balance spring. It's like they cancel each other out. I am sure this explanation is simplified, but I think that's the gist of it. If you look at the picture, you can easily see the yellow brass metal contribution to the balance. Just inward to this is a darker grey metal, which is the steel applied flush to the brass. These were costly to make, and when special self-compensating balance springs were invented (Nivarox hairspring,) then there was really no need to make the bimetallic wheels. Monometallic wheels worked fine with the new type of spring.
