Source: NOVA: "Cracking the Code of Life" Web site
Genetic information is coded in DNA molecules. Every one of our cells (except red blood cells) contains a nucleus, and inside the nucleus are chromosomes. Chromosomes are built from long strands of a molecule called deoxyribonucleic acid (DNA). The twisted ladder-shaped DNA molecule is made of smaller molecules called nucleotides, or bases, that pair up and form the ladder's rungs. Though there are only four different types of nucleotides in a strand of DNA (usually referred to by the first letter of their chemical name -- A, T, C, and G), these molecules are repeated again and again -- three billion times in the human genome.
Genes are specific sequences of DNA that provide the code for building particular proteins, a two-step process. First, DNA is transcribed into a similar molecule called RNA. Then it is translated into a specific type of protein. In many cases, one gene codes for one type of protein. But that's not always the case. Humans, for example, have a low gene count relative to our high level of complexity. Higher animals like humans have evolved greater complexity, not by acquiring more genes, but by using their genes in multiple ways to create a wide variety of different kinds of proteins. About a third of all human genes code for several, sometimes many, different proteins through a process called "alternative splicing," which occurs as RNA is being translated into proteins.
To understand this process, think of a segment of RNA as a compound word: The word alternative, for example, can be read as a single word, or it can be split to form two new words, alter and native, that have entirely different meanings. Similarly, RNA can create proteins with its entire length, or with shorter sections that independently create their own proteins. This alternative splicing, in which one section of RNA is active at one time and another section is active at a different time, often corresponds to different stages in the growth of cells, as the protein needs of the cells change.