Programming software is like this....
1. The programmer writes the program in one of the computer languages (IE..COBRA, C#, C++, JAVA...etc...) This is technically your "Source Code" and it's ususually written in a text file that can be read by Notepad or other text editor.
2.This program has to be "Compiled" into a language that the computer can understand. Once compiled, the text file (your program) is "coded" meaning that it's turned into a type of machine language. You can't open up and read the contents of the program in the file unless you have a "Decompiler" which decodes it. Try loading up a random executable file for a program in your computer. You will usually get a big pile of gibberish.
With the "Source code", anyone who knows the programming language used can decompile or decode the file or program itself, therefore turning it back into the original text file therefore, making the "core" program editable. Then it can be compiled again with any changes made.
A lot of time, software designers will use applications of their own design to construct software as well. In order to work with programs made this way, you will have to have a copy of the application that was used to make it or at least have knowledge of how to read/decode the application's code.
I'm sure there's others here who could give a more concise explanation, but this is how I understand it. There's probably a lot more to it than what I mentioned.
