it's a silly question yes, but how does it work?

i know that i can pay for stuff out of my bank account rather than on the credit card (because i've done the £500 i needed to over the past 3 years or so) but what about getting money paid IN?

where does it go?
who sees it?
how do i know how much i've got?
and how much does it cost to get out?
and how mnay times can i go and get money out?
or is it best to get it all out in one go?
and HOW do i get it out?

i've been stung for £160 before and i'm still no where near figuring out where it went so is it a good or a bad thing to get money into the paypal account?
or is the cash/cheque thing better?