Ok, my dumb moment, but I have never seen a teflon baking sheet.Can't quite picture how a baking sheet would work as a pressing sheet.

not dumb- it's not a "cookie" type baking sheet- it's a flexible mat you use to keep foods from sticking. Think silpat or silicone mat. You can get big ones to cover the bottom of yout oven to keep it clean.

I'm thinking that the teflon sheet is used under the items being pressed, not as a pressing cloth on top of the items. Am I confused or is this correct?

I think you are correct, Bobbielinks. It is funny how terminology can be confusing.

they are used primarily for fusing applique. they usually go on top of the applique and fusiable will not stick to the iron. I use one under the applique when I am using the no melt plastic as a template and bit of starch to turn the edges over.