Many encryption schemes are based on Public Key Encryption, or PKI. This form of encryption is based on complex mathematics, but the basic principal is quite simple: Everybody has two Keys.

Read on for the details of how Public Key Encryption works.

HowStuffWorks has a good overview of what encryption is and how it works. It talks about symmetric key methods which are known to go back to Julius Caesar, and continues on to modern electronic encryption. If you want to get a basic idea of what encryption is and how it works, this is a good place to start.

http://computer.howstuffworks.com/encryption.htm