So the methylation you refer to is histone methylation. Which causes changes in the packing state of the DNA. However there is more to the story! Epigenetic modifications actually happen directly to the DNA itself, and these modifications also have an effect on transcription efficiency and downstream protein production. In fact research is ongoing looking into details about how these epigenetic modifications can be passed from a parent to a child. And mind you these can come and go as we age and develop, so this is hypothesized as a way that learned traits can be passed on to children. The whole field is quite fascinating.

Here's a paper on a diferent type of epigenetic modification in case anyone is interested:

http://onlinelibrary.wiley.com/doi/10.1576/toag.12.1.037.27556/pdf

I post this one, because it doesn't seem to be behind a paywall.