Maybe I haven't yet fully understood how transactions work. And if so, please forgive me my stupid question.
But I assume it to be "just" a digitally signed message like "send 1 BTC to Bob" where Bob is identified by its public key (of course obeying to some protocol). The transaction is then signed with my private key which prevents later modification and then sent to the network for hashing and block-building...
I'm not sure how Bob is notified of the transaction. Does his client software really have to parse the block chain to find the transaction where his public key is listed?
And even more interesting is the question how the sender of the money is restricted to only send as much money as they have? Is this all managed by the Bitcoin client? If so, I could write my own software which just uses the (or: any) amount of (Bitcoin) money together with the recipient's public key and build the transaction ASN specified somewhere in the protocol. Who checks the balance and when is it checked? Does my Bitcoin client fully dive into the block chain and calculates the balance? Is this then trusted by the network? Or does the network (e.g. when building and hashing the block) also a verification of all the public keys from their first transactions on?