So I have this plan to make this giant mod. It was going to be more for personal use, but I may release it to the public.
Now, about those noob questions, I plan on making a new World Space for it, and here's what I need answered:

1. When I take a break from the editor and exit out, I have to save my work as a new esp, how can I just overwrite my work and leave it at that? (or should I make an esm and just save all the esps to it?)

2. What programs do I need to download to do this? (besides CS of course).

That's about all I got for now, but I would really like a detailed answer to my first question, like almost step-by-step (only had my for pc about 2 weeks now, super noob).
My friends and I made a website dedicated to this project, so if you're interested in looking into it, check out the site: http://www.oblivionfalcormod.webs.com/

Thanks guys.

After you save your .esp the fist time, you need to set it as the Active file each time you load it in the CS from then on. Doing so will ensure that any changes you make will be saved to the .esp. The http://cs.elderscrolls.com/constwiki/index.php/Main_Page is a site you will probably want to spend a bit of time on. You may also want to check out http://www.invision.tesalliance.org/forums/.

THANK YOU!!! Finally a reply where people aren't shoving down confusing programs down my throat!

That would depend on what you plan on doing in your mod. If you want to create/edit meshes you'll need Blender and NifScope. If you intend on doing any re-texturing, then you'll need Gimp or Paint.net. TES4Edit is also a good utility to have for a variety of things. Essentially though, all you really need is the CS. Everything else just gives you more options to work with.

Ya, all that is really far out of my league, Thanks guys.

Don't sell yourself short. It may seem impossible to learn how to work with all that, but once you start you'll probably learn quickly. Just remember that old Chinese proverb: "A journey of a thousand miles begins with a single step."