I'm ALSO working on a project like this, and only made it past that because of the help I was given on this forum! I know it seems REALLY FREAKIN' odd, and you're not sure how it's gonna work, ...but my advice is to trust your insructions. Chance are the person who made that pattern has a crap load more experiannce than you or I.
Just try this, just do exactly what the pattern says and see what happens. I asked a million questions about this in a bunch of diff ways. But when it came down to it, I still didn't really "get" it, so I just did what the pattern said.
Guess what? ...IT WORKED!
after only 3 weeks of knitting I did a project with shaping, increases, decreases, and all sorts of stuff I'd never even HEARD of! ...I'm just hoping that my next project will be a lil easier to understand because of this!