Excellent question.
This is the key question of Einsteins theory of special relativity. Let me give a brief, but hopefully clear explanation...
First of all, from you question, I believe you understand that motion is relative. Let's look at this with an earthly (without relativity) example. Adam is standing on the side of a road.
Beth drives by him in a car. Adam measures the speed of Beth and notes that she is going 50 miles/hour.
Adam sees Charlie go by at the same time. He notes that Charlie is going 70 miles/hour.
In this example, Charlie passes Beth. Charlie appears to be going 10 miles/hour.
OK, this is all fine and good. You should understand that Charlie is going 70 miles per hour relative to Adam, and that Charlie is going 10 miles per hours relative to Beth. Both of these statements are perfectly true-- and that the method of measuring doesn't matter (radar gun or measuring the time for the distance between them to increase for example).
We can say that the speed of Charlie is
relative, meaning it depends on whether it is measured by Adam, or by Beth.
NOW, here is where it gets a bit weird.
Let's assume that Adam is on the Earth, and that Beth in on a spaceship going 1 mile/hour less than the speed of light relative to Adam (I make it less because it is impossible for Beth to go the speed of light). This means that Adam sees the distance between between Beth and him increase nearly 185,999 miles each second.
Now Let's assume that Charlie in this example is a photon of light (yes I am imagining one single specific photon).
Under Special relativity Adam will see Charlie the photon go the speed of light, in other words, he will see Charlie go 186,000 miles in one second.
Now, since Beth is going 185,999 miles per hour relative to Adam, you would expect Beth to see Charlie the photon (the same photon that Adam is watching) to be going 1 miles per hour.
But she doesn't.
Beth will see Charlie going the same speed that Adam sees. This means that Adam will see the distance between Charlie and him increase 186,000 miles each second, and strangely Beth will see the distance between Charlie and her increase the same 186,000 miles.
If this doesn't seem impossible to you, go back and read it again because you don't understand. But the speed of light is
not relative. In the car example above speed is relative (as you would expect), but the speed of light is not relative.
Now how does the math work.
Well, when Einstein realized that the speed of light was not relative (we call this absolute), this meant that the rate of time must be relative. The only way that Adam and Beth could the same light have the same speed, even though they are moving relative to each other, is if they are experiencing time differently.
And this is exactly what happens.
Einstein developed a set of equation that explains how people moving at different velocities relative to each other, experience time and distance differently. An important point is that they are both equally correct.
Incidently, these equations imply that nothing can go faster than the speed of light. Basically if somthing is going the speed of light relative to you, you will observe time stop for this object.
This is a very quick explaination. I did a quick google for "Special Relativity" and these links (after a brief skim) look decent...
http://www2.slac.stanford.edu/vvc/theory/relativity.html
http://science.howstuffworks.com/relativity.htm