and need to know the order that they should be loaded. I heard that OBMM handles this but HOW??
OBMM doesn't handle that, aside from placing esm files first. You'll need to learn about load order yourself to be able to figure that out, and do it manually.
Also, I heard that the esp files get changed to a different file type (I thought ALL mods were esp files!).
You're probably thinking of OMODs. This is not an autuomatic process, you have to tell OBMM you want one made. Even with OMODS, you'll still end up with an esp file you work with. OBMM doesn't eliminate that, it just provides an alternative method for installing/uninstalling mods instead of doing it manually.
PLus, is OBMM as good as everyone says?
While it's not the only program that can sort your mods for you, it's probably the easiest to figure out and work with. And you need to have some utility that allows you sort your mods, otherwise you end up with conflicts and problems.