I don't get King safety

One thing I tend to do when I castle King side is leave the 3 peons in front, and it always bites me in the ass. And when I decide to sacrifice "King Safety" and move the peons out I get crucified for doing so. 

When are you supposed to give up on it? I seriously don't get it. When I leave the peons, usually my opponent has developed his peons way into the centre and slowly advances towards my king until the defense cripples. 

Is castling over-rated? Just finished this game and I think in retrospect castling was a terrible idea, although it was at a really late stage in the game

http://www.chess.com/livechess/game?id=776929759

 With your rating you are asking the wrong question -- you have some basics you need to learn.  There are some free lessons in mentor and video that teach the basics.  Then move on with additional tools with a premium membership.

So you won't answer my question because I'm branded as a terrible player because of my rank

Right on, cheers

And isn't understanding King Safety important for beginners? Every beginner chess video I've watched touches on it...

Put your king's knight on f3/f6, and leave him there (not entirely applicable in your Scotch Game, though).  After you castle, h2/h7 is the weakspot you need to protect, and the knight does a great job.  Playing h3/h6 is often conducive to king safety--it prevents h2/h7 sacrifices, backrow checkmates (like in this game), and protects g4/g5 from attacking knights that want to land there.  For a beginner who has trouble with king safety, I would recommend the h-pawn move the first time you're not sure what else to do.

Don't leave the pawns in front of your king undefended, and taking the queen was unrelated to king safety...

I wouldn't worry about it.  Just castle early and play chess.  Like Mark said, you're losing for other reasons than "king safety".

Castling helps keep your king safe but to ensure your king is safe you have to keep your opponents pieces away from your king. Don't let your opponent build up pieces near your king, and block pawn advances aimed at breaking up your king's pawn structure.

Also, don't do the h pawn move in the late endgame unless there's a good reason. It should usually be done a bit earlier.

first of all- anything anyone tells you to do, including me, when stated as a general rule- does not apply if the opponent has a tactic to exploit it. Always always check for tactics before thinking about generalizations. Now-

1. castle early. not necessarily as soon as it is possible, but definitely prior to launching an attack. 

2. the castled king is safest when the three pawns in front of it are on their starting squares, in a straight line. Of course move them if you have to, such as if they are attacked, or if it's an endgame where backrank mates are possible. But in the middle game, pawn moves around your king create weaknesses, and weaknesses are bad. 

3. if the center is locked up, and the flanks are open, the center is sometimes safer for your king. or if they have a lot of pieces pointed right at where your king would be if you castled, sometimes it is better not to castle, or to castle in the other direction.

4. do not capture pawns opposite where you are castled if a lot of pieces are still on the board. no matter how juicy they look. (obviously there are exceptions to this, but it is almost always dangerous to do this, as it gives your opponent open files). 

5. if you fianchettoed the bishop where you castled, avoid trading off that bishop. i mean if you win material alright.. but not just for the hell of it. 

6. i can't really think of anything else obvious off the top of my head, hope this helps

The king is where all the power is!  Keep at it, you're doing a good job!

Castling is good.    Castling earlier would have kept you from losing your bishop.   Castling when you did wasn't terribly helpful.  In fact, Rd7 then would have been technically stronger.  

Flight squares are good if your opponent isn't in position to exploit them.  E.g. your opponent was down to a rook and a dark square bishop - maybe sneak in g3 (giving the light square g2 as a flight square) at some point, to avoid a back rank mate.

Additionally good: Rd2 instead of Rd7 when the pawn was on the second rank.  You would have neutralized the advanced passed pawn, and exchanged down to rook vs. bishop.

You missed a lot of tactics and the kingside just came apart. It wasn't an issue of castling. Try to work more on your tactics.

The trouble with relating king safety in general principles is that general principles lose out to the needs of the specific position, or in other words: tactics.  And attacks against your king will always be tactical, so exceptions are extremely common.  The best way to defend your king is to identify and hinder tactical threats before they arrive--not beginners' stuff--while avoiding creating weaknesses in your king's defenses.  But pushing the h-pawn forward one square is one move you can make in the opening to shut down an awful lot of tactical avenues without weakening your king's defense too much (although slightly).

There are other things you miss and you think the problem is castling.

What you need for your level is the ability to think simple.Your game has several "blunders" but there is a characteristic point in the game that clearly shows lack of simple thinking.

Your opponent just played 22...e2.

Isn't it obvious that the very advanced e2-pawn has to be your primary target?

Isn't it obvious that if you don't eliminate that pawn you will soon be in trouble?

Isn't it obvious that the only move was 23.Rd2 followed by R(any)xe2?

 Also the game had several blunders.Nd4 is blundered twice in the first 7 moves and although your opponent kindly refused the gift , not castling could still get you into serious trouble(12...Re8+).

Castling is not your problem.

Not knowing why you are losing , is.

You were still winning up until 23. Rd7, which loses. 23. Rd2 would have won, since you could meet 23. ... Bxf2 with 24. Rdxe2.

More generally, moving the castled-side Rook's Pawn up one square in order to prevent a mating attack is usually quite safe IF (a) the center is sufficiently open to prevent your opponent from organizing a Pawn-swarm that would use your advanced Rook's Pawn to open lines around your King, and (b) as long as you can afford the loss of time involved in shuffling that Pawn forward.

Just remember we're talking about a self-identified beginner.  I certainly don't play h3/h6 as a matter of course, but for a novice who struggles to find and understand effective opening moves, this is one that addresses his number one complaint, and like you say is usually safe.  OP made a lot of mistakes and his king safety wasn't the deciding factor, but had that pawn been on h3, the game wouldn't have ended the way it did.  At that level, every move you're not checkmated is another chance to come back and win.  Of course, an alternative approach is to play your game and take your lumps until you begin to recognize the dangers inherent in your style, and adjust your style accordingly.

There is an old adage, "Knight on f8, no checkmate."

King safety begins in the opening, continues through the middle game -- storming the kingside, and depends on a sound understanding of tactics.

Again, may I suggest that you are asking the wrong question.

The old saying goes, castle early, castle often.

Castle when you have nothing better to do.