| Nah, you got it spot on there. Ketones are the waste products produced when your body uses protein and fat for energy, rather than glucose. Ketones can indicated either ketosis or diabetic ketoacedosis (DKA). Ketosis is a totally natural, safe and benign state to be in - you're just burning fat, that's all, but importantly you have enough insulin in your body to satisfy your requirements. DKA is a problem because it means there isn't enough insulin, and your blood is slowly turning acidic.
If you have ketones and normal BGs, you're probably fine. If you have ketones and high BGs, you'll need to start doing something. Also, don't test for ketones first thing in the morning. A lot of people with have trace ketones in their morning urine but this doesn't mean anything.
Ketones are like smoke - they show there's a fire somewhere, but they don't show whether it's burning something good or something bad. | 
