I prefer Carl's description; http://www.youtube.com/watch?v=MlikCebQSlY&feature=relmfu

Interesting, but I really dislike the Drake equation. First, it doesn't really tell you anything; so many of the "variables" are unknown, arguably un-knowable, or overly broad generalizations that it makes the whole thing rather pointless. There is nothing mathematically intelligent about it. When so many of the factors are things that we can't even really take an honest guess at, you might as well say "N = N". Instead, it tries to work backwards and just overly complicates the whole mess.

Second, a whole bunch of it is based on things that are, in my opinion, false premises. In fact, you could provide reasonably solid arguments against the relevance of every single factor/variable.

Take the first 3: how many stars are there, how many have planets, and what percentage of those planets are habitable. Why must life come from planets? We've discovered life on Earth in thermal vents with temperatures in multiple hundreds of degrees C, frozen layers well below zero C, places with no light, oxygen, etc. etc. Who's to say that other things that are recognizably alive couldn't exist in other environments that seem "extreme" to us, outside of a planetary setting?

fl, fi, and fc are all things that would require us to exhaustively search every single planet in the galaxy, not just across space but across time as well, to really "know". If we could do that, then we could just give a direct answer for N to begin with. Seems pointless.