A relative recently asked me for help regarding the standard usage of the word, "lie," and its confusing counterpart, "lay." Let me start by saying that virtually no American gets this right all of the time and very few ever get it right at all.
The confusion stems from several factors.
First, the two words have similar meanings, that of, more or less, lowering a person in the case of lie, and lowering an object, in the case of lay. Secondly, many Americans do not consistently differentiate between the past participles and past tenses of irregular verbs--compare have run and have ran, and have come and have came, which are often used interchangeably by many people. Third, when used reflexively, "lay" may be properly used when normally one would use lie. Finally, lie and lay share a conjugal form, that of the word, "lay," but in different tenses, and this is probably the most difficult aspect regarding keeping these words separate.
Let's look at the present and past tenses for these two words:
Lie: I lie -- Lay: I lay
you lie -- you lay
he lies -- he lays
we lie -- we lay
they lie -- they lay
lain -- laid
Lie: I lay -- Lay: I laid
you lay -- you laid
he lay -- he laid
we lay -- we laid
they lay -- they laid
So here is where most people get tripped up: the past tense of the verb "to lie" is the same as the present tense of the verb "to lay." This tends to make the verb "to lie" feel like a present form when used correctly in the past tense and people instinctively tend to dislike this.
One of the most famous novels of all time is called As I Lay Dying, by William Faukner. Most people probably perceive this as a present tense but it is in fact the past tense of "to lie."
Here are a couple of other famous examples. The traditional children's prayer, Now I Lay Me Down to Sleep appears at first blush to be incorrect but what is happening here is that because there is a direct or reflexive object pronoun, which is "me" only the verb "to lay" can be used. The verb "to lie" is intransitive, which means it is a type of verb that cannot take an object.
Simon and Garfunkel had a famous song called, Bridge Over Troubled Water, with a lyric, "like a bridge over troubled water, I will lay me down," which is similarly archaic but correct due to the following reflexive pronoun after the verb "to lay."
One way to usually get this right is to use the verb "to lie" when we are referring to ourselves or to someone else's lowering themselves downward. Thus, I lie down when I am tired. I lie in the sand to get a tan. She lies down everyday at 3 p.m.
The problem here is when we want to talk about the past, because then, to parallel the above examples, a person will have to say: Yesterday, I lay down when I was tired. I lay in the sand to get a tan. She lay down everyday at 3 p.m.(but presumably no longer does). Unfortunately, most people are going to perceive these correct forms as being in the present and not the past, and we haven't even gotten to the past participle issue, with the strange sounding "lain" being the correct form for the verb "to lie."
I wish I could make this even easier but given the difficulty most people have with this distinction, try the following rule of thumb. If no person or thing follows the verb, use "lie." If a person or thing follows the verb, use "lay."
If I want to lie down, first I must lay the baby down.
When I lie out in the sun, first I lay a towel on the sand.
At night before lying down, I say, "Now I lay me down to sleep...."
Any questions, just leave a comment and I will try to respond. But right now, all this grammar is giving me a headache so I think I will lay down my laptop and lie down for a spell.