In search of some good photos to use for this topic, I found what I think may be the most succinct version ... at Kathy Ireland's site, of all places!
Memorial Day, originally called Decoration Day, is a day of remembrance for those who have died in our nation's service. Memorial Day was officially proclaimed on May 5th, 1868 to honor and decorate the graves of fallen soldiers during the Civil War. Later on, this holiday came to include fallen soldiers from any war.
To honor Memorial Day from the gardening world, Moina Michael wrote a poem about Poppies and War in 1915, inspired by the poem "In Flanders Fields." She then began to wear red poppies on Memorial Day in honor of those who died serving the nation during any and all wars.
Later a Madame Guerin from France was visiting the United States and learned of this new custom. When she returned to France, she made artificial red poppies to raise money for war orphaned children and widowed women, which became a tradition that spread to other countries as well.
For some lovely photos, see this site.