Okay, really i am not an expert in the field of UX design and many really have better grasp of what user experience design is about.
In the end, my simple explanation: it is about you the person doing an action with an object. We the “designers” analyze these events.
(and i have to say designer is not the right jargon for this terminology because today everyone associated with that word designer as someone who is artistic – or can draw! which is not really the case. engineers, business, mathematicians, etc etc who cares/empathize with humanity are in a way the designers)
but i saw this several days ago and you really have to go to the flickr page of iA to see how they split this diagram into different conversations of all the roles people play in this process of user experience design. If gives clarity to what we do, but also allows to make better questions to wonder if this is what we are doing or how we should improve ourselves.
Flickr Photo Download: The Spectrum of User Experience: Preparing the next blog entry.