DNF = Did Not Finish.
Clothing/shoes = wear whatever you are comfortable wearing to start with. Once you decide you really like this madness, then you can get into more lycra and such. If you are using MTB shoes, great. If not, that might be the next step. Again, others will have tons of detailed advice but if you are a beginner, don't sweat it. Run what ya brung.
If you live in Portland, you are in luck. One of the best regional series us run there. check out:
http://www.crosscrusade.com/
The "Series Info" tab will get you most of the basics about the series, others will be announced or posted at the start of races. Biggest one is, if you pull out of the race, TELL THE OFFICIAL. You'd be surprised how many don't.
Bottom line: Get your bike and go to a race and just do it. You will get winded, probably fall once or twice and generally have a damn good time.