Transistor Terminology

A transistor has three legs: a collector, an emitter and a base. Below is the symbols for an NPN and a PNP transistor.

NPN transistor

PNP transistor

Transistors as switches

The easiest way to understand transistors is to think of them as switches. You can switch a big current (between the collector and emitter) with a much smaller current (in the base). Lets look at an example:

NPN transistor as a switch (on)

NPN transistor as a switch (off)

The circuit above is a typical example of driving LED's from a microcontroller or a PC's parallel port. The port is well protected because it will only supply a small current, though the small current is enough to switch a much bigger load.
Transistors is also handy to convert between different voltages (5V and 12V in the example above.)

A PNP transistor works the same as an NPN transistor, except the current flows from the base, not into the base..

PNP transistor as a switch (on)

PNP transistor as a switch (off)

Also note that the emitter is always tied to the fixed voltage (+12V or GND) when using transistors as switches.