I've been learning on and off for a while on my own; I know quite a number of chords, but whenever I pick up a music book, it seems I need still more chords o play any of the pieces! I've heard the three-chord theory for a long time and it's been repeated here, but I still don't know how to put it into practice!

Also, I think you have to distinguish between playing rhythm stuff (the chords) and playing the melody? For some reason, I find the melody a lot easier, even when (or especially when!) trying to follow a piece of music.