Signed and Unsigned

Two's complement is used to sacrifice one bit in a byte and interpret it as signed. If the high bit is 1 (in other words if the unsigned value is 128 or greater), we treat it as negative, as if we had subtracted 256 from it. Note that nothing in the byte itself identifies it as signed or unsigned.

  0-127 ($00-$7F): positive
128-255 ($80-$FF): negative (value - 256)

The CPU and the Bus

Think of the CPU as an intricate timepiece.