What exactly is it? and how do you work it out? I was listening to a conversation the other day where people were talking percentages but I was not sure what what was meant by all the figures. If anyone can either explain, or point me in the direction of an idiots guide I would be extremely grateful

As you do not seem to have had any replys to your question ,  I thought I would send you this link as it may give you a wee bit of help.
http://www.tenset.co.uk/pedserve/index.html
I myself am not all that clued up on it but hopefully you will get some replys from some of the experienced breeders on here who will explain it all to you .

as far as i understand its a meauser of how inbred a dog is. the lower the % the less inbred it is.

i was told the formula is (but i dont understand it so it could be wrong) 

COI = sum[ (.5 ^ (a + b + 1)) * (1 + c) ]

a = Generations between sire and common ancestor
b = Generations between dam and common ancestor
c = COI of common ancestor

you may find these usefull

http://www.ashgi.org/articles/breeding_coi.htm
http://www.canine-genetics.com/breed.htm
http://www.dogchannel.com/dog-breeds/dog-breeding/article_13820-2.aspx

thanks. I will do some reading