...my business plan is at the base of my planning system. I update it once a year.
Sitting right above the business plan is my list of projects, which gets updated twice a year.
On the next level is the list of quarterly goals. By necessity, this is a short list -- I like to fit it into a small plastic frame that sits right below my computer monitor.
I've also found that long goals lists leave me feeling overwhelmed. And when I feel overwhelmed, I find ways of avoiding activity that would lead me toward those goals. So, rule of thumb for Martha: If the list is too long for that little frame, it's time to edit the list.
The goals list serves as the guide for that thing at the top of the pyramid: The weekly next actions list. It's what I use to set up my daily activities schedule.
Projects consist of things to do that involve more than one next action. Under GTD, each active project should have at least one next action to keep the project moving. You can have more than one next action related to a project on your next actions lists, particularly if the next action is not dependent upon another next action being done first. Some people use software or different tricks to link the next actions to their related projects. This may make it easier, but you really don't need anything fancy to make it work. During the weekly review, you can check to make sure that each active project has a next action on the next action "context" lists (i.e., you don't have to have a next action on every project every minute of the day, just make sure you update it as much as you need to to "get it off your mind"). For your Someday/Maybe projects that are not active, you don't need to list any next actions on your context lists, but if you have some ideas about what you may want to do in the future you can jot them down in the project support materials or the notes section of your project list, depending how you set up your system.
The terminology will make sense after you read the book or do the Barnes and Noble course, or get the Fast tapes or CDs. Implementing the method is a longer process. Some people have shorter learning curves but for it is taking a long time, probably because I have so many different responsibilities and my projects are so spread out in time. People who are used to using technical supports or have pretty defined responsiblities I think apply it the fastest. I struggled with the language for a long time. Some of the language is a natural one, some actually sounds made up to me, as if to help corporate types to feel more comfortable, but that is okay as long as it works and it is starting to work for me better than other systems I have tried.