It's a lot more convenient to convert AC from one voltage to another. You just make transformers with different numbers of turns of wire on the primary and secondary coils to change the voltage. DC voltages cannot be changed in this manner -- the induced voltage in one coil is proportional to the time rate of change of the current in the other coil. With a non-alternating voltage, this doesn't work (in fact, it's even worse -- a coil of wire, in the low-frequency limit, looks like a short circuit).
Why change the voltage at all? Well, Ohm's law says V=IR, where V is the voltage drop across a resistor, I is the current, and R is the resistance. The power dissipated in the resistor is P=IV=I^2R. In order to reduce the power dissipated in the wires bringing electricity to your home, it is necessary to reduce the amount of current flowing through them. To deliver power to your house with lower total current, a high voltage is chosen. For safety and convenience, the voltages in the power lines very close to your home are only a few hundred volts, but they can be 50,000 volts on long-distance transmission lines which stretch across the countryside.
AC is also naturally generated by mechanical power generators.
(published on 10/22/2007)