Blogger Templates -- Help?!

I am relatively savvy when it comes to computers. This is not because I have gone to lots of classes, and received a ton of formal's because I have come across something I really want to do. At that point, sometimes, I'll look at the help manual, and follow the instructions...but usually I'll just tinker around with it, constantly thinking, "There's got to be an easier way to do this!"

I rarely come across a task that I can't fool around with and figure out.

Enter, my Quest to change my template here on Blogger.

I have looked through every single "resource" I can find...and still can't figure out:
  • What language do I need to speak in order to do this - HTML, HTML Tags, CSS...What?
  • And once I know what "Language" Blogger speaks, what software program can I use to do it? (I have access to lots of nifty programs....Dreamweaver, Publisher, Photoshop, FrontPage...will any of those work?)
  • Once I get it created in the Magic Software Program, can I just cut/paste the code into my template setup?
  • I read somewhere that I have to host my pictures somewhere else. Is that true? If so, why?
  • I keep seeing lots of incredibly spiffy templates out there....if you did your own, please tell me how. Please?
Please share your words of wisdom with me...if it's too long to post as a comment, feel free to email it to me with the title, "Template Wisdom".

Thanks, Cyberfriends!!