I think it's fairly simple really, but the concept of Powering Up/Down makes things more complex. Let's go over the different terms, starting with the actual currencies: 

Steem the blockchain has three "currencies": Steem, Steem Power and Steem Dollars.

### Steem
Freely transferrable currency. It can be instantly converted to Steem Power in a process called "Power Up".
### Steem Power
Steem Power determines your voting power when voting for posts/comments. It is not transferrable, but can be converted back to Steem in a process called Powering Down. Powering down gives you Steem in equal weekly payments over 2 years.
### Steem Dollars
1 Steem Dollar will be worth approximately 1 US Dollar. You can buy/sell Steem Dollars for Steem on exchanges (Steemit will eventually include an exchange for this).  If all goes well, direct uses for Steem Dollars should emerge that let you buy services/products for Steem Dollars.
### Power Up / Power Down
Convert Steem to Steem Power or Steem Power to Steem. 1 Steem Power will be worth more Steem in the future than today as it is protected from inflation. Inversely, in the future it will take more Steem to Power Up to 1 Steem Power than today, due to the same inflation protection effect.

If you have 124 Steem Power and choose to Power Down, you will receive every 7 days 1 Steem Power times the going ratio of Steem Power to Steem. As of right now, May 25th 2016, that ratio is around 118. If we assume that the ratio goes up by 1 per week, a Power Down would look like this:

Week 1: Receive 118 Steem
Week 2: Receive 119 Steem
Week 3: Receive 120 Steem
....
Week 104: Receive 221 Steem

At that point you would have 0 Steem Power left, all of it would have been converted to Steem.

### PS.
This explanation ignores the fact that Steem Power should be in units of millions to keep things simple, and since Steemit does not show that either.