In this work we derive a theory of polariton condensation based on the theory of interacting Bose particles. In particular, we describe self-consistently the linear exciton-photon coupling and the exciton-nonlinearities, by generalizing the Hartree-Fock-Popov description of BEC to the case of two coupled Bose fields at thermal equilibrium. In this way, we compute the density-dependent one-particle spectrum, the energy occupations and the phase diagram. The results quantitatively agree with the existing experimental findings. We then present the equations for the linear response of a polariton condensate and we predict the spectral response of the system to external optical or mechanical perturbations. (C) 2008 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim.