No need to apologize, asking questions and learning this kind of thing is what FIRST is all about!
My team (492 from Bellevue, WA) used quadrature encoders on our robot this year. You have the basic idea right - they can be thought of as IR sensors that count the ticks passing by the wheel. This tells you roughly how far you have traveled along the field (assuming your wheels don't slip).
Our team also used a gyro for positioning. Rather than go into all the technical details here, fairly soon we're going to be adding a technicnal section to our website (
http://titanrobotics.net) where we'll have white papers and good explanations of our robot's control feedback system.
I'll post back here when we get it up.
/me adds this to a growing list of post-shipping FIRST-related todo's
You can read it, and then ask any specific questions you might have.
Good luck-