A common chord progression in jazz, it is actually the harmonic building block of many other progressions.
The chords are built using either a major scale or a minor scale resulting in either a Major II-V-I or a Minor II-V-I.

Major II-V-I
For the example, I shall use the C major scale. (Why? Its more fun than locking a bunch of asian kids in your basement. thats why)
Notes in C Major:
Next, we must build the chord. Since we're doing jazz, most chords are 4-part chords (triads + some form of 7th usually). We use the I, III, V, and VII notes from the appropriate mode of the C scale. For the II chord, the appropriate mode would be D Dorian. Using the notes from C, but using D as a root, we arrive at our first chord(yay):
D F A C - Also known as a D minor 7th chord.
Next, we would be interested in making the V chord. Using the above process, we arrive at:

G B D F - Also known as G dominant seventh.
Finally, the I chord, is

C E G B - Also known as C Major 7.

The same thing is done for a minor progression; however, the minor C scale would be substituted in for the major one to arrive at the chords. Actually, you can substitute Harmonic and Melodic minor scales in, but it just gets more and more confusing from there on. :)

Also, parts of the major II-V-I and minor II-V-I can be mixed and such, resulting in an exponential increase in exhileration..

So, now we know where those weird as hell D-7b5 and such chords come from.

Someone shoot me in my fuckin head