Please explain pre/pro, seperates, amps. ect...

[painted_klown]

Hey all.

I am not sure if this has been covered on here before but at the risk of sounding like an idiot could someone please explain how a pre/pro setup works.

Here is my understanding of it. You buy a preamp/processor. This peice of gear does those two jobs only. Unlike a receiver there is no video switching, tuner, amp section, ect... I think it acts as a "decoder" for various audio sources and that is all.
Secondly, you would then purchase a power amp. This is where I get really confused. Are these power amps multi-channel? Or is there a seperate amp for every channel? Or is it several two channel amps?
Do you buy these components together? Match brands among them? Mix it up to meet your needs?
Then, how are all of these components connected? HDMI cables? Analog connections?
Is getting into a decent seperate setup extremely expensive? (expensive to me would be more than $700 per individual peice)
Like I said...I am unaware of how these set-ups work/what they do but I am intsrested in learning about these types of setups as it would be another world of options available to me when shopping or looking for HT ideas...or I will find that they are not for me.

Thanks, and I apologize for being completely in the dark about this...you gotta start somewhere though.