The US is one of the few developed countries that expects their nationals to continue to file tax returns, no matter where in the world they live. OK, but that said, what you've heard about the exemption is sort of right - but not quite.

A US citizen (or green card holder) must file a US tax return for any year in which his or her worldwide earnings exceed the appropriate threshold level (which can be as little as $400, depending on filing status and a few other circumstances). BUT, if the taxpayer is resident outside the US for a full 12 months - either 12 consecutive months, or all 12 months of a normal tax year - it is possible to take the "foreign earned income exclusion" for up to $85,700 of earned income (i.e. salary).

Like most tax things, there are a bunch of picky rules to apply - like if you return to the US for business trips, you have to figure how much of your salary was actually "earned" in the US, and you still have to declare and pay taxes on most forms of "unearned" income (like interest, rents and other forms of investments).

Go to the IRS website and find publication 54 for overseas taxpayers.: Publication 54 (2007), Tax Guide for U.S. Citizens and Resident Aliens Abroad

Basically, you'll still have to file your US tax return, and you have to declare your foreign salary, but then there is a separate form for taking the exclusion (Form 2555). Take a look at the publication, and come back if you have specific questions. The forms aren't as difficult as they seem - though the first year you spend outside the US can be tricky.
Cheers,
Bev