Sometimes it's referred to as "binding off" as well. So in instructions, you'll see "CO" or "BO". What you're doing is taking each loop on the needle and taking it over the next one-- so the next one is holding it. When you keep doing that (as sknitter said, watch the video for instructions), it leaves a nice finished look on the edge, like a braid, and the stitches can't go anywhere. On the very last stitch, just cut off the yarn, leaving a few inches, and pull it through that last stitch to knot it.
Yep, you definitely need to bind off/cast off. To do that you knit the first two stitches then lift the first stitch on the needle over the second. Now you have one stitch. Knit the next and do the same thing. Watch the video for basic bind off/cast off though so it'll be perfectly clear.
As far as leg cuffs, I'm assuming you have 2 legs that you bound off. I'd pick up sts at the bottom edge. There's a video here at KnittingHelp called Picking Up Stitches (more than halfway down the pg): http://www.knittinghelp.com/videos/knitting-tips