I'm assuming that the only version you have on hand is 7.04, which was
released in April 2007, but a more recent one is recommended. Within a month
8.10 "Intrepid" should be available for download and you can always order a
free CD, postage paid.

Generally you just put the disc in the CD/DVD drive and configure your
computer to boot from it. A "Live" CD will start and run right from the CD
without changing anything on your computer. It will be slower until
installed on the hard drive and can be installed by clicking on the install
icon on the Ubuntu desktop. It's an easy wizard guided installation.

Upgrades can be done by clicking the icon that will appear from time to time
with new versions and bug fixes. You do need a reasonably fast internet
connection.

The "shell" is also known as the command line interpreter. In DOS and
Windows that is "command.com:. It's the software routines that make a
terminal screen work, with a # symbol as the prompt. Most people prefer to
use the "GUI" or graphics user interface with the mouse where available -
and most things can be done that way. However, Linux will require some use
of the shell and it's not that difficult once you find specific step by step
instructions for what you need to do.