Middle Game?

So, I went into a Barnes and Noble last night and noticed that there were people playing chess. I went over and started talking to them. They play there every Tuesday. They invited me to play. So I sat down and played three games. I won the first and lost the next two.

I was honest and told them up front that I wasn't very experienced. After losing a game I asked the 16XX strength player if I had messed up in the opening, because the game went down to an end game of just a couple of pawns and a knight each. He said my opening was fine but my middle game and end game were really just plain bad. I was surprised. I thought the middle game was ok to have arrived at an end game almost equal to him. I understand teh end game was bad but I thought he was going to say the middle game was fine.

So, how does one know if their middle game is bad? I see people look at a chess game that to me looks like it could go either way and say that one side is ahead even though material is the same and nothing is in real danger...I don't get it. What did he see that I didn't?

How do you play a sound middle game?