In Depth Depth of Field

Focus and depth of field are affected when the aperture opening is large enough to allow multiple light rays reflecting from a single given point on the subject to reach the film spread out enough that the film - and our eyes - no longer register a single sharp point of light. As there are infinite rays reflecting from every point on the subject, we see infinite points of light - or a diffuse spot - on the film.

When rays are bent properly by the refractory optics in the lens, these infinite rays reconverge to one point on the film, just as they originated from one point on the subject. But when rays from distances farther or nearer than the ideal focusing range reach the optics, they are bent differently, and do not reconverge sharply on the film surface. In actuality, there is NO depth of field range as there is only ONE finite distance from the lens in which the rays from a given point will reconverge perfectly. The perceived depth of field comes from the films ability to resolve a single point. The coarser grain the film, the larger any given point will appear, thus smaller diffuse spots may seem just as small and focused as truly focused points. Finer grain film can resolve the tiny differences in focused vs non-focused points better. Similarly, our eye can only resolve a given detail, beyond which points and spots are indistinguishable from each other. It is the range of distances from the lens that produce on the film spots similar in size enough to points as to be considered 'focused' that comprise the depth of field.

Smaller apertures allow less of these errant rays to the film, thus smaller spot sizes, and higher perceived focus and subsequently depth of field. The only affect color has on the system is that poorer grade optics exhibit noticeable diffraction - uneven refraction of different wavelengths of light. An ideal lens bends all wavelengths the same amount. Lower quality optics bend light unevenly. If this difference in bending is enough to be visible on the film, color fringes appear and apparent focus is decreased.

BTW A pinhole camera work without a lens to refract light because the aperture is so small than the only rays that get through are the ones that converge close enough to each other to appear focused. Since very little light can get through this tiny hole, exposures have to far longer than traditional lenses.

Look here for some illustrations and further explanation:
http://entertainment.howstuffworks.com/camera2.htm