the way i see it, the wood essentially acts as a damper between both ends of the string. therefore certain properties of certain wood give a different frequency response, the closest analogy is to that of a low pass filter.
wes, i think that coment about ppl who 'have ears' is a little silly to be honest. i dont doubt there are differences between wood, in fact i know there are. but to 75% of the earths population, that just isnt noticed. and to say that those ppl(i may be one of them) have no ears? seriously. i congratulate you and others who have such a good ear for music but i dont think people who are building their 1st 2nd or 3rd instrument should be too worried about their choice of wood. imo there are far more important factors to be worrying about if you are only learning to build. a poorly constructed instrument made of the finest wood would sound poor compared to a guitar made of the cheapest crap by the finest luthier in the world.
basically what im trying to say is that some people read too deep into the tone of wood question and should eb concentrating on other more important factors.
p.s i do not claim to be in any way decent at building guitars or wholly knowledgeable on the subject, just my €0.02