Think about an ordinary light bulb. It has a certain resistance R. Suppose you connect it to a DC source, say, a battery. Then a DC current will flow, I = V/R, the filament will heat up and glow just like it's supposed to. Now it doesn't matter which way you hook up the battery.
If you switch the polarity of the battery the light still works. The light bulb doesn't care.
AC voltage to your house works the same way but the polarity changes 60 times per second (in India it's 50 times per second). Light bulbs still light. A mathematical way to think about it is that the power dissipated is proportional to Voltage times I and since I is proportional to V then the disipated power is proportional to V2
and is independent of the algebraic sign of the current or voltage.
On how the current reaches our homes: The elctrons in the wirse form a nearly incompressible fluid, because their negative charges repel each other. Their concentration is essentially forced to match the concentration of positive charges in the metal nuclei. Think of other nearly incompressible fluids, like water. If you have a long pipe of water, you can make alternating water currents down at one end just by pushing a piston back and forth at the other end. The fluid already reaches from one end to the other, so a shove is all that needed.
(published on 12/21/07)