Example of negative equity:
You buy house for €250,000 in 2005 with 90% mortgage of €225,000.
In 2008 house worth €400,000, mortgage is now €210,000. Your "equity" is €400,000 less €210,000 = €190,000.
In 2009 house worth €190,000, mortgage is now €200,000. Your "equity" is €190,000 less €200,000 = - €10,000 i.e. you now have negative equity.
In simple terms when you owe more to the bank on your mortgage than your house is worth you are in negative equity. It has nothing to do with what you paid originally or how high it got during the boom.
Negative equity is only an issue if you run into trouble paying your mortgage, want to switch mortgage providers, increase mortgage etc. If you can continue paying your mortgage over the next few years you should be able to ride out the dip.