I don't understand the directions from Knitting Pure &Simple's Baby Tunic.. I am beginning the hood....

The directions read : cast on 3 stitches for hood casing. Now using the same needle, beginning at edge of neck, join yarn and pick up 8 stitches across front etc....

Do I pick up the stitches and KNIT THEM ? to keep my working yarn in position ( since I casted on 3 for the hood casing).? And how do i join the yarn?

Thank you for any help!!

Here's a video for picking up stitches.
http://www.knittinghelp.com/apps/flash/video_player/play/166/1

You just start knitting with a new yarn and then weave in the ends later. After picking up and knitting the stitches your yarn should be in the right place to continue.

You'd pick up the sts and knit them at the same time so the yarn stays with the sts.