ROFL I remember the first time the concept of classes and objects was explained to me. My brain melted.
To this day I stand by my opinion that this isn't something that is easily explainable when a new student starts programming. Instead this is something they need to see for themselves. It is like when you look at a picture of a candlestick long enough and it suddenly resolves itself into two faces. Mess about with code long enough and how classes and objects relate to one another becomes obvious.
A large problem though is that people aren't interested in the fundamentals when they can just drag 'n drop. I've done my share of interviews and the 1 question they always have to ask now is what is the difference between a class and an object. Apparently a lot of people don't actually know >.<