Jazzy, it's a notation system developed in Nashville by the players that based the chord changes on the scale steps from the key the tune is performed in.
Say you've got a basic tune in E Major, the usual E-A-B change would be expressed as I-IV-V. It gets as complicated as you want to make it, but that's the basic concept. You then approach tunes the same way you learned scales, arpeggios, etc.: You play the same 'shapes' in your fingering starting from whatever key you're playing in. Then you think of it that way as opposed to a certain key, position on the neck, etc. Admittedly, it works best with easier idoms, country, blues, etc. Might not be the best thing for complicated jazz, though I know guys that do it quite well.
This always worked for me, as with guitar/bass necks everything fingers the same way, unless you're at the nut or the high end of the fingerboard; you just shift up or down the neck to be in the right key. I came from a keyboard background, where the difference in say, C Major versus C# Major is a HUGE dfference technique-wise because it's virtually no black keys (C) versus almost all black keys (C#). Amazingly it was hard to not still think that way on a guitar, for me.
If you do a web search for 'Nashville Number System', you'll find several sites that explain it better than I can.
J o e y
(Message edited by bigredbass on August 20, 2010)