(All my rings are unital, but not-necessarily commutative.)
Localizing non-commutative rings is more difficult; the localization does not exist for every set S of prospective units. One condition which ensures that the localization exists is the Ore condition.
I don't get this. Suppose $R$ is a ring and $S \subseteq R$ is a subset. Write $S' = \{s' : s \in S\}$ for a set assumed disjoint from $R$, canonically in bijection with $S$. Okay, can't we just write:
$$S^{-1}R = R[S']/\{ss'=1,s's=1 : s \in S\}?$$
(By $R[S']$, I mean the (not-necessarily-commutative) $R$-algebra freely generated by the set $S'$.)
In more ring-theoretic notation:
$$S^{-1}R = R[S']/\left[\left(\bigvee_{s \in S}(ss'-1)\right) \vee \left(\bigvee_{s \in S}(s's-1)\right)\right]$$
(Everything in the above line is dealing with two-sided ideals; so $(k)$ denotes the two-sided ideal generated by $k$, and $\vee$ denotes the join in the poset of two-sided ideals, and similarly with $\bigvee$.)
Question. What goes wrong with this construction? In other words, what does "the localization of $R$ at $S \subseteq R$ doesn't exist" actually mean?