Re: How to tell if a site is secure with Internet explorer 7
It's all pretty complicated but simply put it's something like this:
https:// means the data you submit from forms is encrypted. If someone intercepts what you submit it will appear as jibberish.
The second part is the certificate. This is what gives you a reasonable amount of certainty that the server is indeed who it says it is.
If you wanted to setup an E-Commerce site, you'd have to purchase a digital certificate from some place like Verisign. You have to submit a lot of proof to them that you are who you say you are. Then they'll make a digital certificate that you'll install into your web server.
If you really want to know how it works, do some googling / wikipedia on SSL, Secure Socket Layer, Digital Certificates, Verisign etc...