I think you might want to read this: http://www.knoppix.net/forum/viewtopic.php?t=2638

dpkg -i package.deb installs a single deb from the directory where you run the command, unless you specify a path like: dpkg -i /home/jsweatte/tmp/package.deb

The apt sources.list is used to get packages over the net. If I wanted to install, say nano, I would do:
su (to become root [which you probably knew])
dselect update (to update my local cache on what's out there)
apt-cache search nano (self explanatory)
apt-cache show nano (to look at the packagedescription)
apt-cache policy nano (to see which version I'd get from which repository)
apt-get install nano -s (to simulate the install with the -s switch)
apt-get install nano (to install it)

If I wanted to get rid of it later I would do:
apt-get remove nano (to just remove it)
or:
apt-get --purge remove nano (to remove all it's config files as well)