Ok...I'll try to break it down and if I'm wrong, I'm sure somebody will correct me here...
A) This only works in Limit poker (because we're talking big bets...Bonch is right for NL...
B) You count two different ways through-out the hand. PF and after the flop, everything is small bets (SB from here). After the turn and river, you count everything in Big Bets (BB from here).
C) Big Blind is concidered a SB. Small Blind is concidered 1/2 the big blind (!/2 a SB and 1/4 a BB). Keep in mind that in some games, the small blind is a little less (or more) then exactly 1/2 SB. IE: In
PokerStars $.25/$.50 LHE game, the small blind is only $.10.
D) To count the SB preflop, you add 1 for everybody who calls the big blind. A raise is concidered 2 (a reraise 3 and so forth). Jst count if UTG Calls (that's 2 1/2 SB in the pot right there), UTG+1 raises (that's 4 1/2 SB in) folds to button who calls (6 1/2sb) small blind calls (8SB) and big blind folds (8SB) and UTG Calls (9SB total PF).
E) Keep adding after the flop in the same manner...once the Turn hits, take your SB count, divide it by 2 and that's your BB count and start counting the bets again...in the same way.
F) The reason it's easier to count bets instead of actual money in the pot as it helps with figureing your pot odds easier (If, after a bet, there's 5BB in the pot, you know you have 5:1 pot odds to call).
G) It also helps when moving to different levels of play...ie: if you're used to figuring the odds using total money in the pot at a 1/2 table, and you move to 2/4, you have to get used to thinking of those numbers, however if you're doing it by bets, it doesn't matter...a BB is a BB when it comes to odds.
I hope this helps.