The Lisbon Treaty is a document that enables the EU - in the shape of the European Parliament and the Commission - to be part of the domestic decision-making in every aspect of our lives apart from Defence and Foreign Policy and Taxation. Even in those areas it does have powers, but these are subject to a veto.
How will it affect our lives? Simply put, we can no longer change governments when we vote at general elections, because our law making is part of a much wider system which is not accountable to the usual principles of democracy.