From what I read at the FAQ's, eight planets orbit Nirn. That means Nirn is the center of the system, right? Then how is Nirn getting sun light? Are one of the eight planets giving Nirn light?

The sun is a large hole on the sky leading to Aetherius, the most magical place, created when Magnus decided that he didn't like what was going on here at all and buggered off.

Everything you'd like to know is http://www.imperial-library.info/obscure_text/cosmology.shtml.

so daedric realms are not planets? then are they on different planes of existance entirely?

Those planets, by the way, are the eight Divines.

You can see Oblivion when you look into the night sky, but I don't think you can really see any planets up there, mostly just nebulae and other space bodies. But the Daedric realms are probably planets, because they are made of the Princes themselves, and a god's physical manifestation is a heavenly body. They might be some pretty weird planets though, not spherical to the mortal eye at surface level, in five dimensions, or what have you.

(And they orbit Nirn? This is one topic I have never known much about. Is this taken from any source other than the Dwemer observatory? And does that mean the eight planets are included when you day Mundus?)

day?

*say* ASDFG <_<

If they orbit Mundus, then they too float in Oblivion... but that also means that Mundus refers to the nine planets and two moons, while Nirn refers to one?

Aye, Mundus is the plane, Nirn the planet and Tamriel the continent. Nobody ever sticks with it though and the terms are used interchangeably.