Picking up on a theme in several of the comments, I'd like to jump into the very hot water of the perennial debate about dependent origination. I like to say that when I was in Thailand, I saw only two topics that would be sure to generate heated debate among the monks; the correct interpretation of the dependent origination and the allowability of cheese in the afternoon.
(Not wanting to get lost in the legalistic minutiae of vinaya, we'll leave the latter aside for now.)
The twelve-fold dependent origination is a cornerstone of the Buddhist teaching, essentially a detailed elaboration of first and second noble truth, or in the scriptural phrase, "an explanation of how this whole mass of suffering comes to be."
The teaching itself is a subtle and difficult one, and as so often, the original texts are quite terse and formulaic. These factors have led to various attempts at detailed elaboration. Two of these have gained prominence in the Theravada world.
The traditional model, sometimes called the "three lifetime model," is the one established in the orthodox tradition by Buddhaghosa in the 5th century A.D. (The explanation of dependent origination on my web-site is based on this model.) The term "three lifetimes" is a bit of a misnomer, it should really be "many lifetimes." The model supposes that some of the factors refer to events from previous lifetimes, some to this lifetime, and others to future lifetimes. For example, the crucial link sankhara -> vinnana (formations to consciousness) is interpreted as past karmic formations causing rebirth-linking consciousness.
The other popular model is sometimes called the "momentary" model. Although some version of this interpretation was known to Buddhaghosa, as he mentions it in passing, it has only come into prominence in recent decades through the work of the great Thai teacher Ajahn Buddhadasa. This model prefers to see the dependent origination as occurring in it's full cycle in every single moment of consciousness. Thus, the links of birth and death are interpreted metaphorically, rather than literally. (Here is a site dealing with Buddhadasa's interpretation.)
Without coming to any definite conclusion (although in the interests of full disclosure I'll say that I lean toward the traditional model) I'll make the following observations;
1. I don't think the two models are mutually exclusive, despite what some partisans on both sides would have us believe. The process of cause-and-effect detailed by the dependent origination can, and probably do, occur on several time scales. We are coming into birth every moment as we take new objects of consciousness and run the gamut of feeling, craving and clinging. But we also go through the processes of actual physical death followed by rebirth periodically. The dependent origination serves as an explanation for both inter-related processes.
2. While some of Ajahn Buddhadasa's disciples have gone so far as to actually deny that there is any rebirth in the traditional sense, this does not appear to have been the Ajahn's view. I don't believe there is any place in his writings where he categorically denied the reality of physical rebirth. He did say something like "rebirth has nothing to do with Buddhism" but what he may have meant is that Buddhism should be about attaining nibbana (and thereby ending rebirth) rather than seeking a fortunate rebirth. This may have had a lot to do with the milieu of Thai Buddhism at the time, which in his view was neglecting the higher teachings.
I have also heard that when he was asked point-blank about this, he would say "What do the suttas say?" When the reply came back that the suttas clearly teach the actuality of rebirth (as they indisputably do) he would say, "Well, we musn't go against what the Buddha said." Make of this what you will.
3. From my reading of Ajahn Buddhadasa's writing (not comprehensive) it seems that the main reason he taught the momentary view was it's utility for practice. It is no simple matter to practice with factors spanning several lifetimes, but we can all watch the mind go through it's changes in the here and now. There is a lot to be said for this way of looking at it. In particular, watching the mind go through the sequence contact to feeling to craving to clinging to becoming is a very important aspect of developing insight.
4. Finally, whatever the merit of the two models practically or theoretically, it is quite clear which one is closer to the original texts. Whenever the Buddha gave detailed descriptions of the twelve factors, he always described birth and death in literal, not metaphorical language. Birth is coming into existence in one of the six realms, through one of the four modes of generation etc. and death is the failing of the faculties, the destruction of the body, the passing out of this realm of being etc.
POSTSCRIPT on Rebirth;
A correspondent alerted me to another web-site dedicated to promulgating Buddhism without Rebirth. Without getting into a detailed critique, it should be enough that this character quotes "the Buddha" using Paul Carus' Buddhist Gospel as a source. I've dealt with the dubious influence of this book before.