Moodle's filters read text and media that the users put on the site. The filters can then do three things with that material: link, interpret, and restrict.
These filters can now be enabled site-wide by the administrator, disabled site-wide, or be turned off by default with the option of the teacher enabling them in individual courses.
A filter can automatically link words and phrases to items in your site. If you activate the Glossary Auto-linking filter, whenever phrase appears on your site, it will be highlighted and will link to its glossary entry. When a reader clicks on the phrase, the reader is taken to the glossary entry.
Secondly, a filter can interpret what you have uploaded. For example, you could upload a document that is written in the markup language called TeX. The TeX Notation filter would interpret this document and enable Moodle to display it correctly. There is also an Algebra Notation filter that interprets a special markup language for writing math formulas.
Lastly a filter can restrict the kind of content that a user can place on the site. For example, the Word Censorship filter can filter out a list of bad words that you don't want to appear on your site. Every time that text is uploaded or entered, it is checked against the list of forbidden words.
You can find the Filters settings under
Site Administration → Plugins → Filters
The Auto-linking filters search the text on your site, and automatically link to items when they find an item mentioned in the text. For example, Glossary Auto-linking looks for terms that are in any glossary, and when it finds them, it links the term to the glossary entry. The term is highlighted, and when a user clicks it, the user is taken to the glossary.
Activity Names Auto-linking searches course text for the names of course activities. When it finds the name of an activity, it links the activity. This means that whenever a student sees the name of an activity, the student can just click on the name and be taken to the activity. Activity Names Auto-linking works the same way for course activities.
Algebra Notation and TeX Notation search the text for special characters used to describe mathematical formulas. Algebra Notation and TeX Notation are standard markup languages.
The MathJax filter enables you to include mathematical expressions that are created using the MathJax language in your course material.
Activating this filter makes e-mail addresses on the site unreadable to search engines, while keeping them human-readable. If you set Open to google to No, or require users to log in, then you don't need to worry about search engines automatically picking up the e-mail addresses of your students. If your site is open to search engines and anonymous users, then you might want to use this filter to protect user's e-mail addresses.
If you leave the multimedia plugins filter inactive, then multimedia content will usually play in a separate window. For example, without this filter, when a user clicks on a video, that video might open and play in a separate Windows Media Player or RealPlayer window. By activating this filter, you cause multimedia to play in Moodle's multimedia player.
When this filter is activated, any word on the list of offensive words is blacked out. You can enter a list of banned words under the Settings for this filter.
This filter checks the HTML that is written or uploaded to Moodle, and attempts to tidy it by making it compliant with the XHTML standard. If your audience is using a wide variety of browsers (or browser versions), or a screen reader for the blind, making your pages compliant with this standard could make them easier to render.