What key am I in?

OK, This is probably a dumb question that you guys have answered a thousand times, But I'll ask any way.
When someone refers to playing in a certain key, Be it a,d,e whatever does it have to do with the chords they are playing or is it where on the neck they are playing? I think it has to do with the notes on the low E string but I am not sure.
Thanx guys

Hey Dude, you might want to check out my lesson called "Music Theory for Beginners".

http://www.guitartricks.com/lesson.php?input=8078&s_id=78&next_id=8513

You just asked a question that has a very very very long answer. I am going to simply say, yes there is a difference, try this sometime, play a song you know and change one of the chords that is a major chord to a minor chord and visa-versa and tell me if it sounds good. If it sounds better to you you might have stumbled across a secondary dominent chord and then it gets even more interesting. lol sorry theory is a blast. hehe

Originally Posted by: Repeattwice lol sorry theory is a blast. hehe

I hope I can get that kind of excitement going. Right now theory is like speaking greek. I just don't get it. Although the Link DR. Simon gave me helped a bit I'm still pretty confused.

Originally Posted by: spiritinthesky2I hope I can get that kind of excitement going. Right now theory is like speaking greek. I just don't get it. Although the Link DR. Simon gave me helped a bit I'm still pretty confused.

I'm writing a series of essays on basic theory as it applies practically to guitar. I'll email them to you when I'm done.

Originally Posted by: Jolly McJollysonI'm writing a series of essays on basic theory as it applies practically to guitar. I'll email them to you when I'm done.

Thanx Jolly, I would very much appreciate that. :)