The blow off valve, i believe, is our term for what we call a dump valve.
this is located in the engine inlet (compressor) side of the turbo as oposed to a wastegate that is on the exhaust (turbine) side.
The wastegate is triggered by a mechanical pressue swtich (eg a calibrated spring and a lever) so that when a set compressor PSI (boost) is obtained it leaks air from the turbine/exhaust side to prevent the turbo spinning any faster and going over this pressure rating. A typical setting would be 10-20psi going from stock to tuned levels. 14-16 is normally a max before engine mods are needed such as uprated intercoolers and strengthened components on a typical engine.
It is the wastegate you adjust on an engine to up the boost. They can also be electronic and controlled by the ECU letting you 'up the boost' via the electronics.
This device is there to prevent over boosting which will blow the engine and over-revving the turbo. Turbos are very highly stressed components due to high temps and pressures and the high RPM speeds necarssary.
Back to the blow off valve/dump valve
This device is there to prevent the turbo slowing down when the throttle is closed and the air is not needed - ie when you lift off to change gear.
A turbo consists of a turbine, in which exhaust gases enter the outer edge and expand exiting the middle of the centrifugal blade and then continue down the exhaust joined by a shaft to a centrifugal compressor blade in which the air enters the middle of the blade and is compressed, leaving the blade at the outer edge. Therefore when the throttle is closed and the airway is blocked then the air leaving the compressor side has no where to go and will stagnate (back up and stop). This will cause the turbo to slow down. The blow off valve uses the high pressure of the air stagnating to trigger it and release the pressure and a lot of air (hence the woosh noise that ricers love to here when they lift). This air escaping therefore stops lag b preventing the tubo slowing down so when you next open the throttle the turbo is still already spinnign quickly and close to, if not on, boost.