eagertknow,
I am no expert in "scott air packs" (or any other self contained breathing apparatus), but most pressure regulators are based on the same principle, regardless of the application.
The high pressure on the upstream side pushes against a relatively small area of a diaphragm. The low pressure on the downstream side pushes against a relatively large area on the other side of the same diaphragm (and is usually aided by an adjustable spring force).
If the demand (flow) is reduced then the low pressure on the downstream side will tend to rise. As it rises, its force on the diaphragm increases and thus pushes the diaphragm further against the wishes of the (constant) upstream pressure. This causes the outlet valve to close in a little, thus tending to reduce the low pressure on the downstream side. The net result is that, even when the flow changes, the pressure remains "fairly" constant.
I'm sorry if this is a little difficult to follow; I've written it in a hurry! Please feel free to ask a follow up question.
Regards,
Brian