ok to slip a stitch, you just movit from one needle to the other without doing anything to it, in this case you insert the needle into the first stitch as if you where going to purl it, but instead of doing a purl just slide it from the left needle to the right needle.
on and as for having 18 st left,i'll try and go through stitch by stitch.
you start with the 18 stitches you have cast on.
you slip the first stitch, (1) you do the increase, making 2 stitches out of one, so intotal, you now have 19 stitches (3 on the right needle and 16 on the left), then you knit the next 13 sitches as normal, the you do the decrease making 2 stiches into 1 stitch, (you now have a total of 18 live stitches) then knit the last stihe on the left needle. You are left with 18 stitches on the needle, just like you atrted with.
The decrease baances out the increase so you ultimately have the same number of stitches all the way through.
Oh and BTW when a pattern talks about number of stitches it is talking about the 'live' or working stitches on the needles at the time, not including any which have been done on previous rows.
hope thatmakes some sense.