Ha i found the post...
1) Nand is just the name for the type of memory used for internal storage. This type of memory is solid state, and is a type of something we call flash memory. When someone says nand, whether they mean it or not, it just means internal memory or storage. This internal memory, or nand, is broken up into sections. These sections are called partitions. Each partition is used for certain things. The system itself is on a partition designated as /system. There are others, such as /boot, that the system needs to function. These partitions on nand are locked by default, and you can't make changes to them. We call this nand locked, and security is on. This means you have S-ON, as shown in hboot. Nand itself is technically not locked, or at least not the whole thing, as you can write to certain partitions on nand (internal storage), such as /data and /cache. /data is where your apps go, and /cache is a temporary holding place (more or less). In the process of rooting the phone, you will do something called unlock nand. That means you turn off security (S-ON changes to S-OFF), and you can write to those locked partitions. Nand is nothing more than internal memory; remember that.
2) A nand backup is just that. It makes sense if you know what nand is. It is a direct copy of everything on nand, as in, a direct backup of everything on internal storage. It is save to an image, hence the usage of the term, there. An image can mean several things, but what it means here is that it is a clone of your current system. It means that you have a working copy of your system in a series of files. If you break something, and your phone is no longer bootable (after rooting and making a backup), you use the restore process in recovery to take this image (aka clone, aka backup), extract its contents, and replace the entire system with everything it contains. It will take your phone back to exactly the way it was when you made the backup.
3) It's called flashing a ROM because you're *technically* "flashing" to nand (internal storage) any time you write to flash memory. It's not really installing, because you're copying an entire system to internal storage by flashing (writing) to nand (internal storage) in a partition that is normally locked (but unlocked via rooting). For all intents and purposes, it ultimately means the same thing as installing a new OS.
You'll want to get comfortable with these terms, as they are the ones we use, and you'll hear them a lot. Hopefully this clears up their meaning a little better. If not, let me know, and I'll try and reword it for you.
Anyhow...Yeah Mr. Ed that is a priceless story, i will now pass that on.