Originally Posted by: Drew77Are chords names always derived from the major scale?[/quote]
Chords are named by the interval relationships of their notes.

Like scales, all chords have specific formulas. All chords that have a note, another note a major third from the first note, and a fifth from the first note, are by definition major chords.

C-E-G = C major chord
C#-E#-G# = C-sharp major chord
D-F#-A = D major chord
And so on.

All chords that have a note, another note a minor third from the first note, and a fifth from the first note, are by definition minor chords.

C-Eb-G = C minor chord
C#-E-G# = C-sharp minor chord
D-F-A = D minor chord
And so on.

Chord formulas are based upon scale formulas.

Major scale:
1 (WS) 2 (WS) maj3 (HS) 4 (WS) 5 (WS) maj6 (WS) maj7 (HS) 1

Major chord:
1 (WS) 2 (WS) maj3 (HS) 4 (WS) 5 (WS) maj6 (WS) maj7 (HS) 1

Major 7 chord:
1 (WS) 2 (WS) maj3 (HS) 4 (WS) 5 (WS) maj6 (WS) maj7 (HS) 1

Look at my tutorial on music theory for more on this concept:
http://www.guitartricks.com/tutorial.php?input=495

Look at these tutorials for major 7th and minor 7th chords:
http://www.guitartricks.com/tutorial.php?input=501
http://www.guitartricks.com/tutorial.php?input=513

Originally Posted by: Drew77I am trying to get into playing jazz and I want to know my chords really well. I understand the concept behind chord creation and all that I am just not sure what a major 7 would be, considering in the major scale the 7th interval is half a step under the root, unless it is just talking about a major chord (i-iii-v) with a 7 slapped in there, and a min7 is just a minor chord with the same. That would make sense.

In order to avoid confusion only use Roman numerals (I, ii, iv, V, etc.) when talking about chord progression.

There are many types of 7th chords. Look here:
http://www.guitartricks.com/tutorial.php?input=479
http://www.guitartricks.com/tutorial.php?input=499
http://www.guitartricks.com/tutorial.php?input=500

As ever it is a matter of formula. However, the dominant 7th is a certain case in which the chord is essentially derived from a mode (the mixolydian). 7th Chord Forumulas:

Major 7th: 1-maj3-5-maj7
Example: Cmaj7 C-E-G-B
Minor 7th: 1-min3-5-min7
Example: Cmin7 C-Eb-G-Bb
Dominant 7th: 1-maj3-5-min7
Example: C7 C-E-G-Bb

There are also:

Diminished 7th: 1-min3-flat5-double flat7 (or maj6)
Example: Cdim7 C-Eb-Gb-Bbb (A)
Half-diminished 7th: 1-min3-flat5-min7
Example: Chalf-dim7 C-Eb-Gb-Bb (also called a "min7flat5")
Minor Major 7th: 1-min3-5-maj7
Example: Cmin-maj7 C-Eb-G-B
Augmented 7th: 1-maj3-aug5-min7
Example: Caug7 C-E-G-Bb
[QUOTE=Drew77]
Anyway I am just wondering about chord naming because I am not sure if I should be naming them and creating them based on the mode that corresponds to the root of the key or what. This seems particularly relevant with augmented chords since the order of the notes may change depending on where you are playing them in the progression. So a A7 add 9 isn't always the same shape depending on the key since the 9th interval is going to be different depending on the key and chord progression your playing in.

This is a good question! :)

I think you may have things reversed in your mind. For example, A9 always has the exact same formula in every case:

A9: A (1) - C# (maj3) - E (5) - G (min7) - B (9)

Whether or not that exact chord works in the key and progression you are playing depends upon the key, progression and sound you are after. For example in the key of D major it works fine. This is because all those notes are found in D major. However if you are playing in D minor, you might want to use an A7flat9 instead:

A7flat9: A (1) - C# (maj3) - E (5) - G (min7) - Bb (b9)

Because the B-flat matches the notes of D minor better. Of course, you'd be altering the D minor to D harmonic minor in order to get the C-sharp, too!

But the larger point is that the chord formulas are what they are. They do not change based upon key signatures and progressions. In contrast, certain chords will fit in certain keys and progressions better than others, but only because of their formulas in the first place. Make sense?

Hope this helps. Let me know.