I've had a look through the foobar SDK and examples, but I'm still having trouble figuring out how everything fits together..
Can somebody please explain (on an abstract level) how the SDK works?

Also, what makes a dll a foobar plugin? What functions and stuff does it need to implement for foobar to recognize it as a plugin?

Any help would be appreciated. Cheers!

Please have a look at the Plugin development tutorial.

Thanks Ganymed..