I'm gonna give a shot at explaining how DNN works... I hope it's decent.
DotNetNuke is a framework that you can build a site with. The content is displayed through the use of modules. A module is a program that has a web interface that can be placed on a page in DNN. Multiple modules can be placed on a single page; Different or same.
DotNetNuke is designed for use with IIS and SQL Server, which can be run on a Shared Hosting environment. Plans for a shared hosting environment run as low as 4.95 to 19.99 or more per month. (In general, you get what you pay for). With shared hosting you do not need to purchase any licenses for microsoft products as you are using space on the Hosting companies server, and they have all the required licences. Some plans do not include a MS SQL server database, you will need one of thse.
DotNetNuke requires a low technical level to set up on a remote server. There are many people who will help with this, for free on these forums (post questions) and as consultants (check signatures on the forums for ones that look like they have a company). Many hosting companies will also help with setting up DNN, some even specialize in it, such as PowerDNN.com (I'm not hosted with them). PowerDNN has online chat so you can ask them any questions before purchasing a plan (I've spent about 3 or 4 hours chatting with them about options and tools). Many other hosts have the same capability.
Once a DNN site is installed and running on your hosted server, you are able to log in and add/remove/modify modules and pages, customizing the content that is seen when browsing the fresh website. Additional modules can be uploaded so that they become available to be added to a page. These modules can be custom developed using Visual Studios (which is the only time visual studio is needed), or purchased from sites like SnowCovered.com. There are also quite a few free modules available. The core modules the easiest to get as they are ussually included when DNN is installed on the server.
There are multiple modules out there that will allow you to collect/store/display data. I can name 3 off the top of my head, XMod, Data springs forms? (The company Data Springs has one) and OnyakTech H20.
I hope that sheds some light on how using DNN works - but the book suggested above would be a good purchase for more detailed explanations.