Re: Line Terminology
I'm no expert on this, but backing serves the purpose of giving you extra line in case a fish runs. Some fish take a fly and go; if you don't have backing, they'll reach the end of the fly line and break off or snap the rod. backing is a lot cheaper than fly line and is much thinner in diameter. it allows you a lengthier reserve of line for much less cost than if you strung the reel entirely with fly line.
A lot of fish don't typically run, but these often do: salmon and larger trout, striped bass, and striped bass-white bass hybrids ("wipers"), carp, and a lot of saltwater fish, judging by the TV shows and articles. A starter rod and reel set-up will normally use 100 yards of backing. Whatever the amount your reel will take, string as much as you can on so that with your fly line, your reel is "fully loaded." It never hurts to have reserve, even when your fishing species that don't run. You may hook a species that does run, and you'll be in bad shape if you don't have adequate backing--perhaps even buying a replacement rod. The people at the fly shop can help you with this and they should have a machine to do it right.
Backing also helps reduce an inherent problem in fly fishing: the fly line tends to have "memory" from being coiled. That is, when you cast, the line will not be entirely straight as it lies in the water, but will be loopy from having been coiled on the spool. Backing helps lessen this to some extent by making the spool diameter bigger, and thus the loops will be larger and fewer. A good quality fly line will tend to have less memory than a cheap one, by the way.
If coiled fly line becomes a problem for you, the easy cure is to stretch it. I do it by stretching out 15 ft. or so of line from the rod/reel, looping it around a smooth, stationary object and putting a strong, steady pull for a few seconds on both ends (I lay the rod on the grass for this). Then I pull out a bit more line and do it again, working my back considerable into the reserve amount of fly line. Do this a time or two, and the line will be straighter.
You can do this with leaders, too. Sometimes, it's necessary to run your hand along the leader to heat it up a bit by friction. It will more easily stretch that way. Just be sure you don't overdo it by pulling too hard on either leader or line.