Potentially stupid question about AC

[supertimer@aol.com (Supertimer)]

I know this is going to sound stupid, but I'll ask
because csa2 people always know so much about
diverse subjects.

I'm found of adding accessories to my computers
and my vehicle.  The IIGS and the car shares in
common the operation on DC (well, the IIGS itself
operates on DC, I know the power supply draws
AC and outputs DC).  The principles are simple
and easily understood.  There are negative and
positive leads. Electrons flow out of one lead, go
through the devices and do work, and then go back
the opposite lead to complete the circuit.

In the car, the negative terminal of the battery is
connected to the chassis (negative ground).  The
postive lead is connected to a circuit that leads to
the fuse box.  Thus, accessories are connected
by two leads to the fuse box and to the chassis
which in turn are connected to the two terminals
of the battery.

DC makes sense.

So how does AC work?  I know that the current
alternates (back and forth) so negative and positive
reverses sides (either 60 or 50 times a second
depending on the country).  I also know that if
electricity is leaked, in a grounded device the
electricity goes into a wire that leads to a post
that's driven deep into the ground (hence ground
wire).

So why is one lead considered "live" and the other
"neutral" if they seem for all intents and purposes
to be the same.  You can plug something in
backward and it'll still work.  Also, why does the
electricity go into the ground if it leaks from a
grounded device?  Does the earth and the power
station form a circuit or something?

Thanks for your help.