Hi Michael,
There are three main theories about how the Moon was formed, but there are problems with each of these theories. One theory is that the Moon was formed elsewhere and captured by the Earth's gravity. The problem with this theory is that most of the other "captured" moons in the solar system are irregular, asteroid-like objects or they do not orbit in the same direction as their planet. For example, Mars' moons Phobos and Deimos are sort of potato-shaped and Neptune's moon Triton orbits in the opposite direction to Neptune. The second is that the Earth and the Moon formed independently out of the planetary nebula in about the same time and same place. The problem with this theory is that the composition of the Moon is very much like the composition of the Earth, but if they formed independently, one would expect them to have different compositions. The third is that the Moon was formed from material that was ejected from the Earth during a massive impact. This can explain the Moon's orbit and composition, as well as the tilt of the Earth's axis. I think the third theory is the most popular one right now, but it is hard to imagine an impact of this scale.
Kris