The Loop Help

Okay, so I installed WordPress on my site and have it running a dream. Rather than build a new template for it and getting it to look like my site already does, I was going to use The Loop to display the blog in my site. But I can’t seem to get my head around the stuff I need and what I don’t need.

At the moment my site is in ./ and my blog is in ./blog/ so I will need to somehow grab the content from the ./blog/ directory. I am going to create ./blog.php to display the blog. I currently have two different categories, so maybe ./blog.php?cid=1 and ./blog.php?cid=2 to display just the posts from those categories, and then ./blog.php to display all categories.

Any help would be greatly appreciated, and I’d rather people didn’t tell me to read through The Loop pages again and again cos I have read through them about 4 times over the past few days and I’m still not getting it =S. I’m pretty sure it will soon click and I’ll be flying with it but at the moment I’m just confused!!