可以 expresses permission or possibility. For learned ability, use 会 (huì). For physical ability, use 能 (néng). Example: 我会游泳 (I know how to swim) vs 我可以游泳 (I'm allowed/able to swim).
usage
还可以 (hái kě yǐ) means 'not bad' or 'it's okay' — a lukewarm compliment. Chinese speakers often use understatement, so this can actually mean 'pretty good.'
culture
When Chinese people say something is 还可以, it's often higher praise than it sounds. Chinese communication tends toward modesty — 'not bad' frequently means 'quite good.'
