Music is arranged in reoccuring patterns called octaves.
Octaves to the right have higher pitches than those to the left.
There are 12 tones within an octave.
These 12 tones are repeated in higher and lower pitches.

When you select a key, you are deciding which of the 12 tones will serve as the anchor point for the song.
The key is the lowest tone.
In this example, we have chosen E as the key.
Now the octave will begin on E.

Playing multiple tones together forms a chord.

Chords are identified with Roman numerals.

Each Scale Tone is the Root of a different chord.

The spacing between tones defines what type of chord is played (min, maj, dim, aug)

Selecting a Scale defines which 7 of the 12 tones you will use for creating chords and melodies (scale tones).
The Scale defines the intervals between each tone that is used.
Here we have chosen a Major Scale.

Most chords start with the root tone, and then skip scale tones (1-3-5-7-9-11-13).
In this example we are playing the I chord, with the root of E.
Triads contain 3 tones (1-3-5).
Sevenths contain 4 tones (1-3-5-7).
Extended chords can include the 9, 11 and/or 13 positions.

The root of every chord becomes the 1 position of that chord, regardless of scale tone position.
In the second example we play an A (IV) chord, where the A becomes the 1 position.

When you look at music theory, there are certain trends that are highly prevalent in most forms of popular music.  Many songs utilize three different chords.  The i chord is often emphasized, serving as the center piece of many songs.  The iv and v chords are also very important, as they form "strong progressions" from the i chord.  Strong Progressions occur with changes of chords that are three or four scale tones apart, they will always sound good.  Weak progressions occur with changes of chords that are one, two, five or six positions apart.  Weak progressions are good for breaking up the predictability of strong progressions.

A melody is a sequence of individual tones, played from the selected scale.  Most melodies focus on the same tones that are used in the chord that is being played.  They are called chord tones.  When playing a melody, chord tones will work pretty much anywhere in your pattern.  Chord Prism's Smart Scale makes it very easy to focus on chord tones, as it allows you to keep your hand in the same position while chord tones shift to the same spots with each chord change.  Chord Tones are indicated with color stripes at the bottom edges of the Smart Scale keyboard display.

While Chord Tones will always sound good in a melody, you might want to utilize the scale tones in between them as well.  This will provide you with tension and "step movement", which is smoother than the leaps that occur between each chord tone.  Non chord tones should be used in a subtle manner however.  If your melody utilizes too many non chord tones, it probably won't sound that great.  This is often the difference between a mediocre musician and a high level musician.  It is probably a good idea to avoid using non chord tones during strong beats (kick drums) or when a chord is initially played.  You are better served to slip them in on snares or hi hats.

Inversions are used to keep different chords in the same pitch/frequency range.
Here we take the 5 (E) and 7 (G#) positions of the chord and place them ahead of the 1 position (A).
This changes the chord's pitch without changing it's character.

Basslines usually focus on the "root" tone of the chord that is being played.  Chord Prism's Smart Scale shifts the "root" to the first white key in the "Chord Tones" and "Dynamic Scale" mappings.

While using a simple "root" oriented bassline works well alongside a more complex melody, sometimes you want your bassline to have more movement.  When doing this you still want to emphasize the "root", while implementing the same melody techniques mentioned above regarding chord tones and non chord tones.

When using a bassline that has a lot of movement, it is probably a good idea to limit the movement of your melody.  A simple melody with less tones that sustain longer will complement an active bassline well.  When your melody and bassline are both moving around a lot, it often leads to conflict.  A good technique to use is going back and forth between an active melody, and an active bassline.