Ok, here's a short article on transmission on howstuffworks.com
Howstuffworks "How Manual Transmissions Work"
You will probably be most interested in part 4.
Getting more in depth and answering your other questions probably deserves a thread on its own, especially the part on differentials (a subject that is misunderstood by most).
And when I said the clutch is "released" I meant the pedal is all the way down and the clutch is disconnected from the flywheel.