Soul and spirit

"For the word of God is living, and active, and sharper than any two-edged sword, and piercing even to the dividing of soul and spirit..." - Hebrews 4:12a (ASV)

I don't think I've ever thought of this, but what is the distinction between soul (psuche) and spirit (pneuma)? How can they be divided? I mentioned this to a friend this weekend and we ended up with books strewn everywhere--bibles (different translations), a big concordance, a greek dictionary, a greek new testament (ack, i used to be functional there...).

The Word (logos) pierces me to the point of dividing my soul from my spirit. What does this mean?