{mosimage} The altimeter instrument indicates our altitude by measuring the atmosphere's barometric pressure. Since this pressure decreases as altitude increases (roughly 30 hectopascals per 1000 feet), we can, with a fair amount of accuracy, determine our altitude if we know the barometric pressure of the atmosphere at ground level over which we are flying.

It's hardly practical to be continuously informed of the barometric pressure at ground level during a Kastellorizo-Salonica flight, though, for example. To this effect, a specific value has been agreed upon above a certain altitude. This value is 1013 hectopascals (1013.25 to be precise and according to ICAO it's the barometric pressure at sea level in standard ISA atmospheric conditions). When we use this specific value we are NOT measuring our altitude from the ground but rather from the altitude who's barometric pressure is 1013 (in reality this could be at 2000 ft above sea level). What matters to us is not our altitude above sea level but rather that all aircraft agree to measure from this height so there is no danger of collisions and so we don't need to continuously know the barometric pressure at ground level.

This is convenient while the aircraft is airborne but when the time comes to land, we must know the actual distance from the ground so as to avoid obstacles (mountains etc.) and also so as to conform to controllers' instructions. Using the 1013 value is not viable unless the destination aiport's barometric pressure happens to actually be 1013. Since such an occurance is rare, we must determine an atlitude at which aircraft will use the destination airport's actual barometric pressure. This altitude must be the same for all aircraft, else, two or more aircraft may have set a different barometric pressure value in their altimeters resulting in one indicating 3000 ft while another indicates 4000 ft even though both are at the same altitude. Similarly, during ascent, aircraft must set 1013 in their altimeter above a predetermined altitude. This way, we ensure that:

1) Below a predetermined altitude, descending and approaching aircraft have all set the exact same barometric pressure, namely, that of the airport.

2) Upon passing a predetermined altitude, departing aircraft that are ascending have all set the exact same barometric pressure, 1013, and they thus all measure their altitude from the same height above sea level and do not need to know the barometric pressure at ground level.

The altitude at which we set our altimeter's barometric pressure to 1013 is the Transition Altitude.

The altitude at which we set our altimeter to that of the airport or region's barometric pressure is the Transition Level.

These two altitudes are never the same.

Applying these procedures online:

The Transition Altitude is indicated on the airport's Standard Instrument Departure (SID) charts. For example, at El. Venizelos it's 9000 ft.

Practically, this means that we use Venizelos' barometric pressure until 9000 ft which, upon passing, we change to 1013. From the minute we change to 1013, we're flying at Flight Levels and communications with controllers thus refer to Flight Levels and not feet.

The Transition Level, on the other hand, is provided by the controller via ATIS or as follows:

While we're flying using barometric pressure 1013, we saw that we refer to Flight Levels. Upon passing the  Transition Level during our descent, we then refer to feet. How do we know when we've passed it, though?

If we don't know it from ATIS, we'll realize it once the controller stops giving us instructions such as, "continue your descent to Flight Level 140." Such instructions will be replaced by, "continue your descent to 8000 ft QNH eg. 1009." In other words, the controller will provide the altitude in thousands of feet which will also be accompanied by the barometric pressure of the airport or region.
 

To sum up:

Ascent:

Once we pass the Transition Altitude, we set our altimeter's barometric pressure to 1013 and subsequently refer to our altitude in FLIGHT LEVELS.

Descent:

Once we pass the Transition Level we set our altimeter's barometric pressure to that of the destination airport's and refer to our altitude in THOUSANDS OF FEET.