Scone, that's because we're back in the territory of good old British double speak, which is well nigh impossible for a non-British speaker to truly understand. It's almost always derogatory but occasionally not:
My workload is crazy - I think my boss is taking the piss = I'm being asked to do too much and it's not possible; my boss is asking the impossible.
My Mum has asked me to make nice with horrible person X when she knows that X has already done something which is awful = i.e. Mum is taking the piss by asking me to do this.
Occasionally = X said at work to Y (Y looks like Megan Fox) that she's a total heifer (i.e. really overweight, when Y is far from it). Observer would say - no, she's taking the piss, makes you want to feel uncomfortable. [This one doesn't happen much]
Rarely = X said to me that I can do [some impossible and mostly jokey thing] - my reaction would be 'you're taking the piss'.
Can be used to describe a situation where someone is humorously ragging you - i.e. he's only taking the piss, don't take it so seriously
But most of the time is negative towards the person towards whom the piss is being taken iyswim.
Sorry a bit pissed (i.e. drunk, haha) but does this make sense?