Luca, LCD stands for liquid crystal display. Liquid crystals are made of molecules which are usually long (like a rod). Also, it is common for them to be dipoles. This means that one side of the rod will have a slightly positive charge, and the other side will have a slightly negative charge.
Because they have this, electricity can be used to change how the molecules are ordered. (The rods can point up and down, side to side, etc.) The way that these rods are positioned determines the way they interact with light and therefore what you see when you look at them. Each pixel, or point on the monitor, will have a certain amount of electricity applied to it so that you can see a certain color.
In crystals, molecules are all lined up in a particular order and have a particular orientation, or way they point in space. Molecules in liquids are free to point in various directions. The reason for being called "liquid crystal" is that the molecules are in between these two extremes. Some aspects of the alignment and positions are fixed in regular crystal-like patterns while others are irregular and liquid-like. For example, in one particular type of liquid crystal the molecules' directions all line up but their positions are irregular.
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(republished on 07/17/06)