you are offside when your head, body or leg is in an offside position when compared against an opponent's LAST BODY PART. For example, check out Chicharito's goal against France in the World Cup:



as you can see, his whole body is beyond the 2nd last man's head and body (the last man would be the goalie). However, that defender's leg is the measure of the offside line as shown by the darkened area of the pitch. That defender's leg rendered Chicharito ONSIDE. A very good decision by the linesman, in fact i think the World Cup 2010 tournament has one of the best offside/onside decisions i've ever seen in the recent times (amidst the terrible linesman call over the past few years).

So when those hard-to-make offside decisions involves only the leg goes beyond the offside line, it is because the leg of the striker goes beyond the defender's last body part (leg, head or body). Hand's are not counted.

the goal was CLEARLY offside. stupid commentators...

but the dive was classic...