Multiple Sclerosis is a disease that results from demyelination and inflammation along axons. In some cases destruction of axons can also be seen. While the specific cause is unknown, there are several theories. One being that an antigen enters the body with structural similarity to myelin, and as the body launches an immune response, resulting in demyelination. The other hypothesis is that it is caused by a virus, which as the immune system tries to rid of, it consequentially damages myelin.
Symptoms of MS result from lesions to various nerve sites. Some examples being blindness (lesions of optic nerve), motor paralysis (due to lesions of the corticospinal tracts), abnormal somatic sensations (lesions of somatic sensory pathways.
Most of these symptoms are probably due to the fact that demyelination leads to compromises in action potential firing. More severe cases of MS have also shown the destruction of axons as a whole, leading to the functional deficits characteristic of MS.
Purves, Dave, et all. Neuroscience, Fourth Edition. Sunderland, MA: C. 2008, Sinauer Associates, Inc. Text.