Modern cryptography uses pretty sophisticated mathematics to hide information as it is transmitted. This often involves really large prime numbers, numbers that can't be factored into numbers other than 1 and themselves. Examples of primes are 2 (the only even prime number), 3, 7, 59, 97, 311, 971, or 2129. The basic idea is that the real information is combined with some crazy huge random prime number that is known to the receiver of the information. So, as the data is transmitted, it is secret, but can be decoded at the receiving end. The assumption is that it would take too long for a bad guy to try to guess or figure out the prime number, so he's out of luck!
Of course, this is a really simplified explanation of one type of modern secret codes. If you want to learn more, and aren't afraid of some math, check out this video lecture, "Cryptography -Science or Magic?", by Dr. James Massey, an expert in cryptography. He was speaking at the Massachusetts Institute of Technology in Cambridge MA in 2001, and the video is presented by MIT World, which offers lots of lectures on various topics. (Please note that the introduction is pretty long, and Massey's actual lecture starts around 6:50 on the timer.)
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