We probably should put up a beginner's guide to the game. The original edition came out over a year ago, and I think some of the answers we posted on the boards were absorbed into the new book as assumptions that people would know what exactly everything meant. I'm thinking of putting up some sort of twice a week free character to show people how the rules work.
However, the new book is completely standalone; it repeats some of the material from the first book, but nothing has been taken out. You don't need the first book to use the new one.
Anyway, on the specific question about character backgrounds, first, understand that they're optional. Your GM can use them as a way to encourage characters to have interesting adventure ideas built into their backstories. If you don't use them, there's no problem, though it might help powergamers if they'd otherwise be reluctant to have vulnerable family members and such.
If you do use them, you can buy them either with skill points or with Hero Points. You don't have to spend both. I was in favor of using skill points only, but Morrus preferred the Hero Point option, so we included both.
