Paul,
DNS allows a name to be associated to an IP address. IP addresses and domain name registration are handled by different providers. When you register, you basically buy that name or address/set of addresses.
Some mythical network administrator has to configure and maintain these various names and addresses. For a small organization, no problem. For large corporations and ISP providers, it's a nightmare. Multiple DNS servers managed by multiple people.
Now there's some other behind the scenes stuff that goes on that is the real magic (in some circles it's called FM - friggin magic, being nice here /w3tcompact/icons/smile.gif). Those names and IP addresses are actually mapped to a physical address on your computer, server, router, switch, or other network device. The physical address is called a MAC address. Part of that MAC address is a pre assigned number which identified the manufacturer of the board, the rest of the number is basically a serial number.
When you attach your device to the network, all of that information is passed along to the internet via something called a gateway. This is typically a router. That router keeps your address and any other address in an area called cache for quick reference. If the router does not know what to do with an address, it send it to the next router (a hop) to find out where to send the data (your stuff). This goes on and on until it finds the destination address. If it can't be resolved (found), you end up getting an error. This can be a false error. The server was down, a latency problem (time it takes for the data to get through), route was broken, etc.
There's a lot more to this, but I hope this short explanation helps. What I've tried to explain is what makes the Internet what it is. A bunch of loosely connected devices which follow set standards to communicate effectively.
You can thank the US Government, particularly DOD, for starting this wonderful service. It has become something that the originators never quite imagined.... /w3tcompact/icons/smile.gif
Terry