from Major Dan, History and Headlines:
On January 1, 1950, a new method of designating what year it is (or was) went into effect with the BP system, meaning "Before Present." The Anno Domini ("the year of our Lord") choice of a starting date for modern counting of years was proposed by the colorfully named Dionysius Exiguus (a monk from what is now modern Bulgaria or Romania) back in 525 AD. (Yes, you can use the letters with or without the periods.)
The Lord referred to in AD is Jesus Christ, which of course seems to slight people of any religion other than Christianity. The BC stands for "Before Christ" and interestingly enough, this system does not have a Year Zero. The year 1 BC is followed by 1 AD with nothing in between. To make matters worse, the birth date given for Christ is usually between 7 and 2 BC. Figure that one out!
The rest of the alphabetical confusion can be read here.