open (LIST1, $list1) or die "cannot open $list1";
open (LIST2, $list2) or die "cannot open $list2";

while (<LIST1>) {
#get all the variables for line from LIST1

  my ($c,$d,$e,$f,$g,$h) = split(/"\t"/);
  # do you mean "\t" or \t?
  # are there " in the file?

  $flag=0; #reset the flag
  # which flag?

  my %list2key= ();
  while (<LIST2>) {
    ($a, $b) = split(/"\t"/);
    $list2key{$a} = $b;
  }
  # This will read your second file once for the
  # first line of your first file
  # As soon as you have the second line of you first
  # file, it will forget about the second file!
  # Maybe you should move this loop out of the
  # LIST1-loop

  if (exists $list2key{$c})
  {
    $name = $list2key{$c};
    #print out to screen as a test then to a file later print "$name $
+d $e $f $g\n";
    $flag=1;
  }
}
[download]

Does this help you understanding the script you copied?