This bit of audio (MP3 - Feed - Web Site) lucidly explains what happened at Bear Stearns, and why the Fed acted as it did. It's worth a good listen if you've been trying to piece together the logic. The audio comes from the News Hour with Jim Lehrer.
[Update: I'd also recommend this piece from the New York Times. It does a good job of explaining the bigger picture.]
On a less serious note, we also have a video that explains the credit crisis with the help of a country music jingle. More astute viewers will note the name of the singer, Merle Hazard, is an allusion to the concept of "moral hazard" that's mentioned in the audio above.