Setting Named Ranges (OFFSET/COUNTA)

I am a novice excel and VBA user, but have been working the past few days on a project to create a data entry form (using Excel 2003 on WinXP). I have the userform created and the textboxes working fine for inputting data into the spreadsheet. I also have comboboxes set up, and if I directly input data into them, they also input that data. So far, so good.

(problem)

Here is my issue: I want the comboboxes to use dynamic / variable ranges, so I have been trying to set up the ranges by defining them as names. I've come across a bunch of examples, but none of them seem to work (all produce an error that the formula is not correct or instead seem to reset the name to just the first cell when I input it).

My sheet is called Dropdown Lists, and there is a column here for each combobox. Each row in a column has the options I'd like used for that combobox. So I am basically trying to name a range as the entries in just one column.

This is what I have been working with most recently in the Name - > Define dialog box that according to everything I read -SHOULD- be working:

=OFFSET('Dropdown Lists'!$A$3,0,0,COUNTA('Dropdown Lists'!$A:$A),1)

This produces an error, that when you hit OK highlights "$A$3" - and if I remove the $ symbols, it skips then to the "$A:$A" until I remove THOSE $ symbols, and then excel will accept it, but when I go to the name, it only highlights one cell. I thought maybe that was OK, but when I tried putting the name into my rowsource, nothing happened - so apparently not.

Questions:

(main question)
- Why will this not input correctly when everything I read suggests this format? Am I not handling the space in the worksheet name correctly (with ' ')? Sometimes excel will automatically add in " " between = and OFFSET and the closing at the end, but this also has not helped. One source I read even recommended taking off the = at the start (also did not help). Am I missing something here?

(follow-up questions)
- Why are you supposed to use "$" before the cell references anyway? I've looked for an answer but haven't found one yet... is that for when you make cell references to cells on an external worksheet?

- What is the "Add" button for on the Name -> Define dialog box? I'm confused to if I am supposed to use this to add the name to the list of defined names, or just hit OK?

- At the bottom of the Name -> Define dialog box is the "Refers To:" field with the formula. On the right of that you can hit a button to go to what seems like another (smaller) formula input box. Why would I ever use that when I could just type it in on the previous box? There is no label for it so I am guessing here - but does it actually do something else (like you need to go to that smaller dialog to input new formulas and the previous box is only for -viewing- formulas, or?)?