I'm also no expert at politics, but here is how the system works where I live, and I think it works pretty well.

1. There are a lot of parties. Traditionally, there are two big ones, which are about along the lines of what the democrats and republicans are in america, who normally get ~70 percent of the votes. The rest of the votes normally go to several smaller parties.
2. You need to get at least 5% of the votes, if you don't get at least 5% then you don't get seats in parliament. (Moreover, I think if you get 1% then you will get some of your expenses paid the next time an election is held. Not sure about that, though.)
3. When you vote, you have two votes: One for a party (That vote is the more important one since it decides how many people the party gets to send to the parliament), and one for a person that is usually from you region. If the region person is from a party with less that 5% and that party has at least three canidates that were elected like this, the region persons go directly into the parliament even though the party didn't get 5% (This actually happens sometimes). If the party has more that 5%, the directly voted persons go into the parliament no matter what number of persons were voted for directly, the rest of the seats the party got are then filled with persons from a party list that the party members have decided upon before the election. If the region person does NOT have a party, you can vote for him/her by NOT voting for a party but ONLY voting for the person. If a person wins in a region this way, he goes into the parliament. (I don't think that has ever happened, but it should be possible). Direct mandates make up for about half of the seats, the other half are list persons.
4. When counting the votes, party size is not taken into account.
5. The party with the most seats gets to be the government, BUT: It rareley happens that one party alone has more seats than all other partys combined. Therefore, coalitions, typically with one or more of the smaller parties, become neccesary. So the big party that wonwill get in touch with one of or some of the smaller parties and decide upon a political agenda that both can sort of agree upon.
6. Government positions, such as minister of defense, minister of family, minister of education, are divided amongst the government coalition.

Now that sound awfully complicated, so why do I like this system?

• It's a representational demoracy. I wouldn't like it if everyone had the possibility to decide about everything. I know I don't have enough of a clue to do so, and I'm pretty sure that most other people haven't got any more clue. When you have representers like here that do nothing but politics, there's at least a chance that they will try to inform themselves about the stuff they vote on.
• It ensures that there aren't too much small, irrelevant parties in the government.
• It does not cater ONLY to the majority, but also to some of the bigger minorities (e.g the green party).
• Even without having a party, you can try to get into the parliament (by direct mandate, the vote-for-a-person thing). The also ensures that there are people from all over the country in the parliament, while the party list gives the party a chance to choose some people they want in the parliament.
• Extremist-ish kill-the-niggers style parties may sometimes manage to slip in, but are normally just ignored. Since none of the big parties dares to make a coalition with them, and since the government coalition can normally out-vote everyone else combined, they have no real power. They can sit around in the parliament and spew some bullshit, but that's it.

... awfully long post. Bonus points if you manage to figure out where I live from the description.