Relativity Demystified

Few days back I realized I don't really know all about the celebrated Einstein's Theory of Relativity which is considered one of the most significant findings of modern Physics. So I set out to read about and understand it. Here are some of the main tenets:

• Notion of space and time as a composite inter-woven concept (space-time continuum) i.e. one is useless without the other, and any event in the universe is described in terms of both space and time.
• Speed of light is the speed at which information travels from the point of occurrence to another point. (since we come to "know" about an event through light, or a radio signal say, both forms of electromagnetic radiation which travels at speed of light - 186,000 miles/sec in vacuum.)
  
• The concept of "frame of reference" that comes up often in Physics which is basically, "where is the observer with respect to the event under consideration". There is no absolute frame of reference since no place in the universe is absolutely stationary (we, for eg. are moving with the earth even when sitting tight in a spot).
• Special relativity says 2 things: One, the laws of physics hold true in all frames of reference. The point to note is that this does not mean the results of experiments or the actual numbers obtained by applying the laws of physics will be the same in different frames of reference, all it says is that the laws themselves will be applicable the same way regardless of the frame of reference. Second, (and this one's the more mind-boggling!) the speed of light is the same (constant) in all frames of reference. Now, why is that unbelievable? Because if you are in a bus that's moving at 30 miles/hour and you throw a ball at 2 miles/hour wrt. you, then an observer outside the bus (i.e. in a different frame of reference) would perceive the ball as moving at 30+2=32 miles/hour. Then, why is light coming from the headlights of the bus not moving at c + 30 miles/hour wrt the observer outside, but instead moving at its good old speed, c, no matter what? Hmm...that's what we need an Einstein to explain to us :-)
• To explain the 2nd postulate above, here's another perplexing truth - an object in motion shrinks (yes, I do mean decreases in length!) in the direction of its motion. This phenomenon is called length contraction. In reality, the contraction is too less to be perceived since moving objects around us are always moving at speeds that are far too small compared to the speed of light, so the change in length is too small. Point to note here is that this contraction can only be perceived by an observer in a different frame of reference than the object. Also, the contraction is only observed in the direction of motion and not in other dimensions of the object.