To follow up on SteveH's opening response, let's start with the technical answer that, yes, strictly speaking "polarity" only applies to DC (direct current) voltages, where one terminal is typically labeled "plus" (+) and the other is labeled "minus" (-). Matching polarity is as simple as connecting "+" to "+", and "-" to "-" -- in effect, putting the 'batteries' in the 'holder' the right way!
Alternating current (AC), by contrast, sends the electrons back and forth, switching directions (actually 120 times per second in the USA, yielding 60 full cycles per second). So, there's no actual "polarity" to an AC output, but (just to make things confusing!) there *are* several concepts sometimes confused with (or mislabeled as) polarity:
- First, many AC distribution systems arbitrarily connect one pole of the system to ground -- literally driving copper rods into the earth to connect it to the ground, and sometimes relying on that return circuit to use only one transmission line. So, if you measure the voltage potential between each of the two power prongs of any receptacle and the ground, one will show line potential (120 VAC) and the other will show no voltage at all (the third prong, if any, is also grounded, or should be). Modern two-conductor plugs and receptacles are "polarized" in the sense that they can *only* be inserted in one direction, providing a reliable ground connection to the device even without the third wire. In modern devices, the chassis is often connected to ground, to prevent stray voltages from inadvertently contacting the user.
- Just to add to the potential confusion, sometimes the device makers create a common connection for distinct voltage outputs -- in multi-throttle train transformers, the "U" terminals are typically common for all outputs, with the other terminal for the various throttles labeled "A", "B", etc. This common terminal may or may not be "grounded" in the above sense, but all circuits will use the single and interconnected terminal as one side of the various power circuits.
- Which brings us to the final (sometimes confusing) term: "phasing". Phasing simply means matching the waveform of multiple AC sources, so the individual AC sources work together rather than against each other when connected in parallel or in series. In practice, this means that you can connect two small transformers in parallel to carry a heavier load than either could individually, or conversely connect them in series to produce the sum of their individual voltages. If the transformers are *not* properly phased before connection, they may tend to short each other out if connected in parallel, or cancel each other out if connected in series.
Oh, and one final confusion: electricity is literally the flow of loose electrons from atom to atom (and/or the reverse flow of "holes" which electrons can potentially occupy around atoms), but rather than "+" designating a surplus of electrons as you might imagine, it actually designated a *deficit* of electrons (i.e., "holes"). I can only ascribe the confusing reversal to the polarity signs having been assigned long before the understanding of subatomic physics clarified what "polarity" really meant.
There -- everything clear now? 
