| To those who believe that conspiracy theories are ridiculous:
Then why does our government pass laws against them?
As stated above, a conspiracy theory is the belief that some crime* is committed through the plottings of secretive groups. These groups may be quite open about their existence but not about their motives (see CIA, the Vatican, Freemasons, and Jews--OK, I'm just kidding about the last three! They're about as conspiratorial as Laurel and Hardy.) Some may be open about their existence and motives, but not about their means of operation (see Communism, Capitalism, Nazis, the Vatican, Freemasons, and Jews). Some may be secretive about their existence and their means but not their motives (see P2, Mafia, the Priory of Sion, JFK, the Vatican, Freemasons, and Jews?). Some are secretive about their existence and their motives, but not their means (see JFK, the Vatican, etc.) Some are just ridiculous (see Men in Black, UFO, the Vatican, Freemasons, and Jews).
To believe in a conspiracy is to believe that there are forces at work manipulating the system to their unfair advantage and covering the evidence. This can be applied to group assassins (think John Wilkes Booth and his friends, the Manson Family, Brutus and Crassus, the Nazis), to organized crime, to a corrupt police force, to price fixing, to lobbies--anything can be a conspiracy. However, it is always good for the conspirators to bring up how silly conspiracies are by giving examples like UFOs, The X-Files, They Saved Hitler's Brain, the Protocols of the Elders of Zion, the moon landing crap, and other nonsense. However, not every conspiracy need involve aliens, presidents, clones, or black helicopters. A conspiracy can be as simple as a group of animal rights activists breaking into a research lab, to as complex as the P2/Vatican Banking Scandal.
Some conspiracies may seem hard to believe, though they may have some truth to them--JFK's assassination, the CIA's dirty dealings in Latin America and possible (though not necessarily conscious) ties to Columbian drug lords, and so on. True or not, they have staken a claim in our pop consciousness and won't go away.
As a literature major, I was exposed to a type of conspiracy theory every time I took a class--Deconstructionism and Post-Modernism seek the ulterior motives of art, seeing art as a social construction aimed at brainwashing the masses (which, to be honest, is more or less what Aristotle was saying, though he used nicer language). Moreover, Deconstructionism believes that no communication can be truly trusted, as it is tainted with both a social construction and personal misaprehension of the universe (the human mind being so limited), and so the truth can never be found, even if it is out there. I won't even get into Post-Modernism, but I do suggest you go read some Pynchon and Vonnegut.
As Robert Anton Wilson points out, the paradox of conspiracy is this: the government, want to hold onto power, mistrusts the people, and so passes more laws; the people, feeling the effects of these laws, resent and mistrust the government; the government, feeling the effects of this mistrust, resents the people and passes more laws... and so on, until you either have a revolution (think Early America) or a collapse (think Rome).
Just because you're paranoid
Don't mean they're not after you. --Kurt Cobain, borrowing pop culture
*A crime in this sense may be something legal and unethical (certain government practices?) or illegal and unethical (assassinations), or illegal and ethical (John Brown?).
BTW: the Vatican and Jews--TWAJS! | 
