Robert Bishop explains some of the basics behind transaction isolation levels:
Lost Updates
It is possible for two or more transactions to modify the same row. While the subsequent transactions are reading the data, the 1st transaction commits its changes. Then the subsequent transaction makes its changes and commits, thereby possibly losing the changes committed by the 1st transaction. In this scenario, the last transaction always wins.
Dirty Read
A dirty read is when a SELECT statement will read against a table that is currently being modified and not yet committed to the database. By default, SQL Server will protect against this on all isolation levels, except for Read Uncommitted or by using NOLOCK in your queries.
This is the first in a series.