How does MIP on an FHA loan work?

I have been reading a lot about the MIP insurance on FHA loans, but I am not clear on how it works. I have read that you can pay the premium (1.75%) up front or have it paid through out the life of the loan at .25 - .55%. From my understanding, If you choose to do the monthly payments you have to pay it for the entire life of the loan but if you pay upfront then you only pay until you have paid off all but 78% of the home. Is this correct? Please someone clear this up for me?