The Circle of Fifths

The Circle of Fifths (shown left) is designed to help understand chord and key theory. It can also be used as a tool to aid in transposition. To determine the number of sharps or flats in a given key, look it up on the circle of fifths.
For instance, to play in the key of A, you can see that it has three sharps.

However, there's more to the story than this. You also need to know which notes are sharp or flat. There's a pattern to this as well. The first sharp is always F#, in the key of G. As you add sharps, keep following along the circle of fifths. So, for the key of D (two sharps), you have F# plus C#. The key of A includes one more sharp, the next one around the circle, G#.

Interested in playing in a flat key? A similar principle applies. The first flat is always Bb. So in the key of F, your one flat is Bb. To play in the key of Bb, you add the next note counter-clockwise. Thus, in Bb, you have a Bb and an Eb. The key of Ab will therefore include an additional Ab and Db.

Another important thing which can be done with the Circle of Fifths is to create a transposition tool. It's slightly more complicated, but still effective. For instance, if you have a piece in Eb that you want to play in the key of C, you can use two copies of the circle of fifths, one small enough to fit inside the other. Rotate the inner circle until the C is next to the Eb. You can then see which notes in C correspond to the same notes in the key of Eb. It should look as follows:
Thus, if you see a D in the key of Eb you can tell that it corresponds to a B in the key of C. An F will correspond to a D. An Ab will correspond to an F.

A further tool is for setting up chord patterns. In major keys, your traditional chords are I, ii, iii, IV, V, vi and viio. Major chords are indicated by capital leters, minor by small letters, and diminished by minor letters and an o after the chord. In the key of C, the chords are as follows:
Thus, Cmaj is your I-chord, Fmaj your IV and Gmaj your V. Many songs follow specific chord patterns, such as I-IV-V or I-vi-IV-V. In Cmaj you can see that I-vi-IV-V translates into Cmaj-Amin-Fmaj-Gmaj.

Well, what if you want to play that same chord progression in the key of Bb? You need to rotate the inner circle, so that the I corresponds to Bb, making it appear as follows:
Suddenly, you have different chords corresponding to your chord progression. You're still using I-vi-IV-V, but instead of Cmaj-Amin-Fmaj-Gmaj, you've got Bb-maj-Gmin-Eb-maj-Fmaj.