Okay, let me try to explain.
Consider the following:
A=1; B=2; C=3; D=4; E=5; F=6; G=7; H=8; I=9; J=10; K=11; L=12
Now, this is a fact that both you and I have never met each other. So if I met you and said the numbers 89101311 (HIJACK) {8=H, 9=I and so on}, it will identify me to you. So if someone else comes to you and tells you he is MSKHAN, you'll ask him for the number. He can't reply because he doesn't know the number. It is known only to you and to me. Correct? So if I came and told you I'm MSKHAN, and you ask me whats the number I can tell you. So it is something which is private to us and only you or I know about it. This number is otherwise known as an Encrypted Key (Private Key or just simply Key).
Similarly, when the car's security was programmed they put in an encryption key both in your car's computer and in the car key's chip. When you insert the key in the lock, a seed value is generated. Both the car's computer and the chip in the key calculate the resulting value (through an algorithm/formula) and if the results match with the private key, your car is unlocked or your car can be started.
Now when you loose the keys, you loose the private key inside the chip as well. So what the dealer does is that he inserts a new encryption key in the both they chip in the key and the car's computer. But he needs both the car and the key in place to do it at the same time otherwise it doesn't work.
So that is what makes the car key programmable. It can be reprogrammed with a new code.
Makes sense?
MSKHAN