Also, if you look at the key sizes, there are 2128 possible keys for a 128-bit encryption algorithm. For 256-bit keys, this is a keyspace of 2256 = 21282128.
Now, the actual encryption depends on the algorithm. Key sizes of 128 bits/256 bits will be for symmetric ciphers. For SSL, common algorithms are RC4 (a 128-bit stream cipher) and AES-128 and AES-256 in a mode like CFB (cipher feedback). Asymmetric key cryptography (e.g. RSA, DSA, El-Gamal) will typically have key sizes on the order of 2048 bits and up.
Symmetric ciphers are generally either stream ciphers, which produce a long stream of bits that are XORed with the plaintext, or block ciphers, which encrypt the message in blocks of a fixed number of bits. Block ciphers have different modes of operation; the most common include ECB (Electronic code book, in which blocks are encrypted independently--this is a weak mode and should be avoided), CBC (cipher block chaining, where the previous block is XORed with the plaintext of the next block and then encrypted) and CFB (cipher feedback, cipher output is XORed with plain text to get the ciphertext, previous block ciphertext is XORed with cipher output to link blocks).
For symmetric ciphers, both the sender and receiver must have the same key. By contrast, in asymmetric key cryptography, Alice and Bob each have a public and private key. If Alice wants to send a message to Bob, she looks up his private key, encrypts the message with it, signs it with her public key, and sends it to Bob. Bob receives the message and decrypts it with his private key. He can also decrypt the signature using Alice's public key and verify that the message has not been tampered with. Asymmetric key crypto usually involves "one way functions", which are easy to compute but computationally hard to compute the inverse.