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NTSC maps RGB color space to YIQ: luminance (Y), which encodes black-and-white (intensity) in a backwards-compatible way; orange/blue (I); and purple/green (Q). I and Q are then band-limited and quadrature-encoded into a composite IQ signal C, which is shifted in frequency space so its spectrum fits into the existing "gaps" in the spectrum of Y. Separation video transmits Y and C on separate wires; composite video adds them together, using low-pass filters at the decoder to separate them (with some loss of quality due to filtering artifacts).
The RGB-to-YIQ mapping and band-limiting parameters are derived from models of how the human eye responds to color and luminance changes from a typical viewing distance. Computer-generated hi-res RGB images that exceed the band limits of NTSC result in nasty aliasing if not properly band-limited before conversion, but NTSC can look quite good if the hardware is adequate and the encoding done properly.