I've been fooling around on guitar for several years. I've always had cheap equipment and whatnot. About 1 1/2 years ago, I started playing seriously, I've been improving, and eventually upgraded all my gear. I use the distortion built into my amp (Marshall Mode Four halfstack), but I was wondering this:

How does the "effects loop" work? Can someone explain this to me? A friend recently said "Well, I have (insert pedal names here) running through the effects loop", and it left me scratching my head. Looking at the inputs in the back of my head, I guess I never really thought about it. What's the difference between using the "effects loop", and just running a cable from my head's input jack to the pedals, and plugging the guitar into the other end of the pedals?

Yeah, I'm pretty retarded.

Putting your pedals in front of the amp will modify the signal before your amp touches it. Putting your pedals in the effects loop will place them after the preamp stage, but before the power amp stage. EQ does well placed in the effects loop.