I found two sites that explained it very well

What is Hydrocephalus?

Hydrocephalus comes from the Greek: hydro means water, cephalus head. Hydrocephalus is an abnormal accumulation of fluid - cerebrospinal fluid, or CSF - within cavities called ventricles inside the brain. CSF is produced in the ventricles, circulates through the ventricular system and is absorbed into the bloodstream. CSF is in constant circulation and has many important functions. It surrounds the brain and spinal cord and acts as a protective cushion against injury. CSF contains nutrients and proteins that are needed for the nourishment and normal function of the brain. It also carries waste products away from surrounding tissues. Hydrocephalus occurs when there is an imbalance between the amount of CSF that is produced and the rate at which it is absorbed. As the CSF builds up, it causes the ventricles to enlarge and the pressure inside the head to increase.

What Causes Hydrocephalus?

Hydrocephalus that is congenital (present at birth) is thought to be caused by a complex interaction of genetic and environmental factors. Aqueductal stenosis, an obstruction of the cerebral aqueduct, is the most frequent cause of congenital hydrocephalus. Acquired hydrocephalus may result from spina bifida, intraventricular hemorrhage, meningitis, head trauma, tumors and cysts. Hydrocephalus affects about one in every 500 children born.

How is Hydrocephalus Treated?

There is no known way to prevent or cure hydrocephalus. To date, the most effective treatment is surgical insertion of a shunt. A shunt is a flexible tube placed into the ventricular system of the brain which diverts the flow of CSF into another region of the body, most often the abdominal cavity or a chamber of the heart, where it can be absorbed. A valve within the shunt maintains the CSF at normal pressure within the ventricles. This procedure is performed by a neurosurgeon, preferably one who specializes in pediatrics if the patient is a child.

What are the Effects of Hydrocephalus?

Since the advent of shunting over forty years ago, the outcome for most children with hydrocephalus is optimistic. Some children with hydrocephalus will have less than normal intelligence, physical disabilities and a variety of other medical problems. Shunt malfunctions and infections, developmental delays, learning disabilities and visual problems are not uncommon. Families need to be aware of the life long complexities of hydrocephalus to insure their children receive comprehensive on-going care and appropriate intervention services and therapies.

This Fact Sheet was produced by the Hydrocephalus Association
http://neurosurgery.mgh.harvard.edu/ha/fact-sht.htm

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Hydrocephalus

Also known as "water on the brain" is one of the most frequently seen problems in a busy pediatric neurosurgical practice. The term "water on the brain" is actually more of a misnomer. In reality most cases of hydrocephalus represent a build up of cerebrospinal fluid (CSF) inside the brain. Everyone produces CSF inside their brains every minute of their lives. This fluid is very similar to the liquid portion of blood and contains various salts and products such as sodium and glucose. The fluid is primarily produced in connected chambers within the brain known as ventricles. The fluid volume produced in an adult is about equal to one pint per day. This fluid then circulates through the ventricles and around the brain and spinal cord. Eventually it is reabsorbed over the surface of the brain into large veins which carry the fluid back to the heart. This orderly cycle of CSF production, flow and absorption maintains a protective environment to the nervous system. In addition, there is no loss of fluids or the salts contained in the spinal fluid.

Hydrocephalus is that state in which something has occurred to prevent this orderly procession of events. If this occurs, there is a relative build up of spinal fluid in the brain which can lead to injury or even death if not treated. It is very important to realize that hydrocephalus is the result of some event on the nervous system and that a child's prognosis is not so much based on the hydrocephalus as the cause of the hydrocephalus. While many cases have no clear cause, the following have been associated with the development of hydrocephalus; bleeding, infection, trauma, tumors, vascular problems, and structural problems. Some occur during pregnancy and others after birth.

In addition, a small number can be transmitted genetically.

In early infancy hydrocephalus is usually detected by the family or pediatrician as a rapidly enlarging head. This may or may not be associated with symptoms such as vomiting, failure to thrive, irritability, delay or loss of developmental milestones. Later in infancy and into childhood, there are rarely rapid changes in head size, but rather symptoms as already described. Depending on the child's age at the time of discovery various radiographic techniques are available to confirm the diagnosis. In the first six to twelve months of life, the diagnosis can often be made with an ultrasound of the brain. After the skull fuses the diagnosis is best made with or CT.  Each of these tests have their plusses and minuses, but overall most neurosurgeons would favor an MRI scan. While this test takes longer then a CT scan and thus usually requires sedation, it gives a much better picture of the brain and the possible cause of the hydrocephalus. This information may effect the treatment options for the child.

It is important to realize that while hydrocephalus is very treatable, the underlying cause may not be or may have caused irreversible damage to the brain. It is important for the doctors taking care of a child with hydrocephalus to determine if the problem is ongoing or if it has resolved but left enlarged but stable ventricles. This can sometimes be difficult to tell and often the decision will be based on many factors including symptoms, eye exams, changes in level of activity or school performance. In addition to this often the child will have repeated (serial) radiographic exams to look for changes in the ventricles.

If the diagnosis of hydrocephalus has been made there are rarely options other than surgery for treatment. If a definable mass is causing the obstruction of flow it may be possible if not essential to remove the mass and allow for normal flow and resolution of the hydrocephalus. More often then not however, the blockage can not be removed and the fluid needs to bypass the normal circulation. Most surgeons use various types of systems called "shunts" to channel the fluid from the ventricles to other sites in the body such as the abdominal cavity, chest cavity or the heart. Each of these sites have various pros and cons, but by far and away the most popular for pediatrics is the abdominal cavity. Here the CSF is absorbed onto the surface of the bowels to be returned to the blood stream along with the vital salts and other products it contains.  

There are many different shunt systems on the market and there is no such thing as a luxury model versus an economy model. Most neurosurgeons are comfortable with one or more systems and utilize these almost exclusively. What is most important is that your surgeon be well trained in all shunt systems, and shunting methods.

In addition to these operations, certain types of hydrocephalus can be treated by making a tiny hole internally in the ventricle to reestablish normal flow. This procedure called a ventriculostomy is becoming very popular due to better surgical instruments and imaging techniques. However, for the foreseeable future the treatment of choice for most types of hydrocephalus will be placement of a shunt.  

As mentioned earlier, the prognosis for successful management of hydrocephalus is excellent. It is however the underlying cause that will ultimately determine a child's outcome.

Credit for information above was taken from the: SPINA BIFIDA AND HYDROCEPHALUS ASSOCIATION OF NOVA SCOTIA CAPE BRETON CHAPTER

Signs and symptoms of Hydrocephalus and or signs of shunt malfunction :
Full, bulging, tense soft spot (Fontanel) on top of the childs head (baby).
Large prominent veins in the scalp.
The child may look downward with only the white of the eyes being obvious (setting sun sign).
Changes in child's behavior such as irritability and/or lethargy.
High pitched cry.
Dizziness
Seizures.
Headache.
Fever.
Vomiting or change in appetite.

Useful Links about Hydrocephalus

 A link to the type of shunt Andrew has the -CODMANŽ-HEKIMŽ

The Hydrocephalus Association

Pediatric Neurosurgery-Columbia-Presbyterian Medical Center in New York City

Institute For Neurology & Neurosurgery
- NY

Pediatric Neurosurgery-MGH in Boston, MA


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