http://www.mielkesfarm.com/dishclth.htm
On all the even rows you leave x amount of stitches on the needle and turn your work and start on the next row. What do you do with the stitches remaining?

You are doing short rows which is why you don't knit all the way to the end. Just knit across to where it says and turn your work. That means you'll have some stitches left on the right needle, but that's what is supposed to happen. I think once you follow the pattern a bit you'll see the pattern start forming. ;)

You'll work those sts later on, so just follow the directions row by row, or st by st and it'll come out right.