Here's something I found on the net:
Yes and no. A popular misconception is that a gas shock works on gas where as an oil (normal) shock works on oil. All conventional automotive shocks work by forcing oil through a programmed set of holes, however a gas shock will use compressed gas to keep the oil under pressure.
This is done largely to minimise aeration or "foaming" of the oil which would reduce the effectiveness of the shock as air passes through the valves rather than fluid. To see what this is like, tip a conventional shock absorber upside down and pump the shaft a few times. You'll notice the movement become jerky and uneven as oil and air intermittently pass through the valves.
The gas also helps to dissipate heat which keeps the oil cooler and maintains the viscosity and therefore the shock "rate". Gas shocks are ideally suited to long travel applications like rallying and off road. In fact, this is where the technology was primarily developed in the first place as lots of spring travel over big bumps really tests a conventional hydraulic shock.
There are many types of gas shock, twin-tube, mono-tube and remote canister combinations for super heavy-duty use like rallying and off-road racing. Most of the economical gas shocks are of a twin tube construction (low-pressure) where as most performance or race gas shocks use a mono-tube (high-pressure) system. There is no such thing as an ideal system, it really depends on the application as mono-tubes may have advantages in some respect but the high-pressure gas can act as a spring complicating the suspension design process.
The main disadvantage of a gas-pressurised shock is cost; more of it compared with a conventional hydraulic. Which leads to a very simple rule of thumb to help avoid confusion. If faced with a choice of gas or oil for the same price, it's unlikely that the real working part of the gas shock is of the same standard and level of sophistication as the oil. You get what you pay for. And, choosing gas shocks generally mean you'll need to design the rest of the suspension system around that fact with spring and bar rates being affected.