Oxidative phosphorylation is a process that occurs inside a part of cells called mitochondria. Each mitochondrion has a special structure which enables it to produce ATP, and the process which goes on in order to manufacture this is called oxidative phosphorylation, because it involves phosphorylating ADP (to produce ATP) using oxidation reactions.
By building up a proton gradient across the inner membrane of a mitochondria, a series of complexes and something called coenzyme Q (collectively known as the electron transport chain) effectively manufacture the ATP.
The structure of a mitochondrion is very, very complicated - and very important. For the purposes of explaining oxidative phosphorylation, we are going to concentrate on just the double-membrane part of the structure, but it is important to remember that that's not the full story.
The best way of thinking of a mitochondrion is probably as though it were the 'power house of the cell - its production of ATP enables the cell to function, and therefore most cells in animals and plants will contain them.
A mitochondrion has a two-fold membrane - an inner membrane and an outer membrane. Between these membranes is known as the inter-membrane space, and within the inner membrane is known as the cytosol. The inner membrane contains all of the complexes for oxidative phosphorylation, and these pump hydrogen ions into the intermembrane space, creating an electical gradient and a pH gradient across the inner membrane. This gradient is what drives phosphorylation, as the high concentration of H+ ions wants to be relieved, and will diffuse into the cytosol.
However, this should all make a little more sense when I've explained what these complexes are. For now, just apprecate that there are two membranes, which separates a mitchondrion into two compartments: inter-membrane space and cytosol.
CoQ is the abbreviation used for coenzyme Q and it is a very important molecule involved in oxidative phosphorylation. Like NAD+ and FAD, CoQ is used to pick up hydrogen ions from other molecules, and transfer them somewhere else.
In terms of oxidative phosphorylation, CoQ doesn't have a particularly difficult job - it just moves the hydrogens on along the electron transport chain, but in doing so it effectively 'carries the oxidation along', which is inevitably a very important role.
The images on the left and right show how CoQ and CoQH2 are usually represented in images on this site; the animation below shows where the hydrogen atoms are kept in CoQH2.
The electron transport chain is a series of complexes which facilitate oxidative phosphorylation. They are proteins (except for CoQ) and they pump hydrogen ions into the intermembrane space. This pumping results in a high concentration of hydrogen ions in the intermembrane space, and so they diffuse back through a final complex, with every 3 hydrogen atoms producing 1 molecule of ATP.
So, we start with Complex I, otherwise known as NAD Dehydrogenase. As the name suggests, this takes the hydrogens from NADH (and, if you remember from the TCA cycle, NAD+ takes one hydrogen ion and one hydride ion). So, when NADH and the corresponding H+ ion are taken by NAD dehydrogenase, this is effectively taking on 2 hydrogen ions (H+) and two electrons (e-). The H+ ions go to a molecule of FMN which is closely associated to Complex I, turning it into FMNH2. Coenzyme Q then diffuses over to take the hydrogens from FMNH2, and the complex returns to normal, ready to accept hydrogens from the next NADH. CoQ is also reduced by the electrons obtained from the NADH, enabling it to transfer electrons somewhere else. This will be important in a moment.
A very similar thing happens with Complex II. Instead of FMN, it is FAD which is tightly bound to the complex, and it is noticeable also that this protein complex does not span the entire membrane. That will become important later. As seen in the TCA cycle and the Beta-Oxidation Cycle, FADH2 can be produced from reactions involving a couple of different enzymes (e.g. succinate dehydrogenasem malate dehydrogenase or acyl CoA dehydrogenase). So, a substrate such as malate may come along and donate its hydrogens to FAD, forming FADH2, which then passes its H+ ions on to coenzyme Q. Electrons are also transfered to CoQ, reducing it.
Then we get to the cytochromes. Reduced CoQ diffuses with its hydrogens and electrons (which it has picked up at Complex I or II) to Complex III, also known as Cytochrome b. Importantly, these cytochromes contain an ferric ion (Fe3+) which can be reduced to a ferrous ion (Fe2+). This is achieved by the transfer of electrons, as the electrons picked up by CoQ from the other complexes are passed on. Therefore CoQ looses the hydrogen ions and electrons that it picked up, and passes the electrons on to Cytochrome b
This is then able to reduce Cytochrome c, which also contains the ferric ion. If reduced cytochrome b (containing Fe2+) reduces cytochrome c (containing Fe3+), then cytochrome b will return to Fe3+ while cytochrome c will now contain Fe2+. This then occurs again, as cytochrome c diffuses over to Complex IV, aka Cytochrome a + a3. So finally we end up with cytochromes b and c both back to normal, and cytochrome a + a3 in its reduced form.
Cytochrome a + a3 has copper atoms bound to it, and it is able to facilitate the production of water. Hydrogen ions (H+) and oxygen approach the complex, and react to form water, gaining the electrons from cytochrome a + a3 and thereby returning it to its original state (Fe3+).
So basically electrons are transferred along this chain and passed on to produce water at the end of it. This process has a large free energy change, so energy is released as the electrons are passed along. This enables the pumping of hydrogen ions across the inner mitochondrial membrane.
Pumping hydrogen ions across the inner mitochondrial membrane is essential for the production of ATP. Even though there is a greater concentration in the inter-membrane space, hydrogen ions are pumped from the cytosol into the intermembrane space by the complexes with the energy released from electron transport.
So, for each of the complexes which completely spans the inner mitochondrial membrane (i.e. Complexes I, III and IV), hydrogens are pumped across the membrane as the complex is reduced.
Complex I pumps across 2 hydrogen ions. These are not the same two taken from NADH and H+, as these hydrogens are passed on to CoQ. No, the hydrogen ions pumped into the intermembrane space are generally from the cytosol.
Complex II does not pump across any hydrogen ions; it does not span the membrane, as is therefore unable to.
Complex III effectively pumps across 4 hydrogen ions. 2 of these are taken from the cytosol, as with complex I. However, you will remember that when CoQ gets to Complex III, it looses the 2 hydrogens it picked up earlier. These are considered to be pumped across by Complex III, and therefore a total of 4 are pumped across here.
Complex IV also pumps across 2 hydrogen ions - and again, these are not related to the other function of Complex IV (i.e. the hydrogen ions which are added to oxygen to produce water are not related to the hydrogen ions pumped across the membrane.
So, if a molecule of NADH is produced (e.g. from the production of oxoglutarate in the TCA Cycle), then 2 hydrogen ions will be pumped across Complex I, 4 across Complex III, and 2 across Complex IV - i.e. a total of 8 hydrogen ions are pumped across for each molecule of NADH produced.
If a molecule of FADH2 is produced (e.g. from the production of Delta2 trans Enoyl CoA in the Beta-Oxidation Cycle), 4 hydrogens will be pumped across Complex III, 2 across Complex IV, but none across Complex II - i.e. a total of 6 hydrogen ions are pumped across the inner mitochondrial membrane for each molecule of FADH2 produced.
And so we reach the final complex, and the production of ATP. Due to the huge number of hydrogen ions in the inter-membrane space, there is a very low pH, and a large number of positive charges. This creates pH and electrochemical gradients across the inner mitochondrial membranes, that makes H+ ions inclined to move back into the cytosol. The hydrogen ions achieve this by moving through Complex V, which has a narrow channel through which hydrogen ions move. You could consider that there is 'tension' between the two sides of this inner mitochondrial membrane, and because hydrogen ions moving back into the cytosol relieves this 'tension', this process is favourable. In fact, it is so favourable that it provides the energy required to produce a molecule of ATP from its component parts - a phosphate group and ADP. For the same reason that breaking the bond in ATP releases a large amount of energy, making the bond requires a lot of energy, and this is provided by the movement of hydrogen ions at Complex V. Or so the theory goes.
For every 3 hydrogen ions transported through this complex, one molecule of ATP is produced. So roughly 2 and a half ATP molecules are produced for every molecule of NADH produced in the TCA Cycle or Beta-Oxdiation Cycle, whereas about 2 are produced from every FADH2.
So why oxidative phosphorylation? Well, the phosphorylation part is easy - ADP is phosphorylated at the end of it to produce ATP. The 'oxidative' part is easy when you think about it, too. The movement of electrons is known as reduction and oxidation. As the electrons were received by complexes in the electron transport chain, they were reduced. When the electrons were passed on and the complexes lost these electrons, it is said that the complexes were oxidised, with presumably the most obvious oxidation occurring at Complex IV, where water was produced. So oxidation and phosphorylation are coupled - without the oxidation occuring in the electron transport chain, the pH gradient could not be set up and ATP would not be produced; hence it is a process of oxidative phosphorylation.