Both major parties lost in popular votes, but the Social Democrat virtually collapsed when the seats were distributed.  The somewhat libertarian-like FDP rose, to produce a 70's-like coalition with the Christian Democrats (no, it's not the German version of our religious right; it's hard to make comparisons with the US).  I like this display of the results, and here is another graphic depiction--just click on the tabs in the box on the Bundestagswahl.  Ignorance of German is no problem.  (It's interesting that the more liberal paper emphasizes the popular vote, the more conservative one the number of seats won, the decisive element.)

For an explanation auf englisch try the NY Times.

Each German party has its own color (as each has its particular flag).  Only recently has American politics spoken in terms of a "red" and a "blue" party.  Obama's big selling point was his 2004 convention emphasis on a "red, white, and blue America."  But we reject not only European social policy but its class-based politics as well.  That's the tired politics that put the Social Democrats at their record low level and may bring down our Democrat socialists as well.

UPDATE:  This report notes the fall of the conservative CSU and the rise of the FDP in Bavaria, changing the direction of the governing coalition.