How is carbon monoxide deadly to humans?

The gas enters your blood through diffusion. While in there, it picks up oxygen that your body needs otherwise, becoming carbon dioxide and, in effect, suffocating you. Your body is only capable of removing so much carbon dioxide at a time, so the amount in your blood builds up because it is being created faster than it can be shed. This leads to a condition called respiratory acidosis, in which your body becomes acidic, and this interferes with normal metabolic processes. The combination of slowing or stopped processes and insufficient oxygen leads to death.

I have to disagree w/ keltillos.  CO poisoning is caused by blocking hemoglobin and myoglobin from picking up oxygen.  The body does indeed suffocate, but not from a conversion of CO to CO2, but rather from the lack of O2.