First Knit Stitch!

Hey,
I’m brand new to knitting, just started today actually, just got my supplies and some string. I’m trying just did the cast on row with no problems but now that I’m watching the beginning continental video http://www.knittinghelp.com/knitting/videos/bas-tech-more/beginning-continental.mpg
I don’t understand what she’s doing with the string with the first knit stitch. Is she slipping the string through the last loop and pulling it through or is she grabbing the loop and then pulling it through to make another loop?
I just really don’t get that step at all.
Could someone please explain it to me better, I watched the actual knitting video which seems to make sense but there always seems to be a clump of yarn at the bottom that I’m trying to loop through, rather than just one string, I get the knot there that I’m trying to go around.
Sorry if this makes no sense, I’m not good at explaining all of this yet.

After you’ve cast on, you’ve got the stitches on your left needle, and an empty right needle ready knit.

I was going to type here how to knit, but realized that it would sound way too confusing. Maybe this will help you more

http://www.stitchguide.com/stitches/knitting/stitch_pages/kn_knit.html

or http://www.theyarnco.com/to_knit.php