****NOTE: This is not a complete instructable for the time being. It goes through the construction of a keypad fully, however it does not yet fully explain or demonstrate the means to make it useful. This will change
Step 1: Understanding the Keypad
A matrix is pretty much a grid like in battleship consisting of rows and columns. each button corresponds to a certain row and column. See the first picture to help illustrate this better. On a 9 button keypad you would use 3 rows and 3 columns. The first button would make a link between Row 1 and Column 1 (R1C1) just like in battleship. 2 would be R1C2, 3 R1C3, and lets say 8 would be R3C2... the rest are illustrated on the image.
The point of this is instead of having 9 different buttons to wire up, all you would need to do is wire up 3 columns and 3 rows for significantly less wires. The real benefits come when you begin adding buttons. adding another row and column (2 wires) would add 7 buttons... see where I'm going?