Election day in the UK

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My understanding of the British electoral process is in its infancy, but I know more than I did a month ago.

If I understand correctly, British voters are voting for Members of Parliament (MPs), not specifically for Prime Minister. They have three political parties: Conservative(Tories), Labour, and Liberal Democrats. As of an hour ago I though Labour and Liberal Democrats were the same group. I guess this would be comparable to republicans, democrats and greens in the US.

Anywho, the party that gets the most MPs elected chooses the Prime Minister, or their leader becomes the Prime Minister, or if the party that wins was already the majority party, their leader remains Prime Minister. Although I have been hearing that if the Labour party stays in power, as the exit polls (hopefully more accurate than in US presidential elections) are already reporting, they may choose to replace Tony Blair at some point.

Well, there you have it..."British Elections for Dummies". Hope I was accurate.