1) "A biological membrane is a form of lipid bilayer, as is a liposome. The formation of lipid bilayers is an energetically-preferred process when the glycerophospholipids described above are in an aqueous environment. In an aqueous system, the polar heads of lipids orientate towards the polar, aqueous environment, while the hydrophobic tails minimise their contact with water. The lipophilic tails of lipids (U) tend to cluster together, forming a lipid bilayer (1) or a micelle (2). Other aggregations are also observed and form part of the polymorphism of amphiphile (lipid) behaviour. The polar heads (P) face the aqueous environment, curving away from the water. Phase behaviour is a complicated area within biophysics and is the subject of current academic research. Micelles and bilayers form in the polar medium by a process known as the hydrophobic effect. When dissolving a lipophilic or amphiphilic substance in a polar environment, the polar molecules (i.e. water in an aqueous solution) become more ordered around the dissolved lipophilic substance, since the polar molecules cannot form hydrogen bonds to the lipophilic areas of the amphiphile. So in an aqueous environment the water molecules form an ordered "clathrate" cage around the dissolved lipophilic molecule." Source and further information: http://en.wikipedia.org/wiki/Lipid ----- ADDED (explanation of polarity and hydrophobic) ------- 2) "In chemistry, polarity refers to the dipole-dipole intermolecular forces between the slightly positively-charged end of one molecule to the negative end of another or the same molecule. Molecular polarity is dependent on the difference in electronegativity between atoms in a compound and the asymmetry of the compound's structure. For example, a molecule of water is polar because of the unequal sharing of its electrons in a "bent" structure, whereas methane is considered non-polar because the carbon shares the hydrogen atoms uniformly. Polarity underlies a number of physical properties including surface tension, solubility, and melting- and boiling-points." Source and further information: http://en.wikipedia.org/wiki/Chemical_polarity 3) "In chemistry, hydrophobicity (from the combining form of water in Attic Greek hydro- and for fear phobos) refers to the physical property of a molecule (known as a hydrophobe) that is repelled from a mass of water. Hydrophobic molecules tend to be non-polar and thus prefer other neutral molecules and nonpolar solvents. Hydrophobic molecules in water often cluster together forming micelles. Water on hydrophobic surfaces will exhibit a high contact angle. Examples of hydrophobic molecules include the alkanes, oils, fats, and greasy substances in general. Hydrophobic materials are used for oil removal from water, the management of oil spills, and chemical separation processes to remove non-polar from polar compounds. Hydrophobic is often used interchangeably with lipophilic, "fat loving." However, the two terms are not synonymous. While hydrophobic substances are usually lipophilic, there are exceptions—such as the silicones and fluorocarbons." "According to thermodynamics, matter seeks to be in a low-energy state, and bonding reduces chemical energy. Water is electrically polarized, and is able to form hydrogen bonds internally, which gives it many of its unique physical properties. But, since hydrophobes are not electrically polarized, and because they are unable to form hydrogen bonds, water repels hydrophobes, in favour of bonding with itself. It is this effect that causes the hydrophobic interaction—which in itself is incorrectly named as the energetic force comes from the hydrophilic molecules. Thus the two immiscible phases (hydrophilic vs. hydrophobic) will change so that their corresponding interfacial area will be minimal. This effect can be visualized in the phenomenon called phase separation." Source and further information: http://en.wikipedia.org/wiki/Hydrophobic

Putting it very simply, a lipid molecule has one head and two tails. The head is hydrophillic and the tail is hydrophobic. This allows it to form a ''phospolipid bilayer'' around the outside of a cell; a membrane. This is two layers of lipid molecules with the tails facing each other (away from any water) and the heads facing outwards (towards any water).