Disclaimer: I'm going to do my best to explain this in as simple a manner as I can. I know you probably know the majority of this stuff, but I wanted to include everything just in case 
As for the whole "confused-about-routing" thing, it really comes down to this:
Instrument --> Microphone --> Pre-Amp --> Interface --> Computer
*edit: if you're talking about something like a keyboard, the routing would skip the microphone/preamp stage, as keyboards output at line-level
Basically, you can make this as complicated or simple as you want, but basically this is the signal flow no matter how many channels you have or what interfaces, what mixers you have, whatever.
Now!
It gets slightly more complicated when you start taking into consideration that some Interfaces have Pre-Amps built right in, and some don't. Think of a pre-amp as a converter from a Mic-level to a Line-level. You need to do this with every microphone you have in order to record it.
So how do mixers come into play? Well, for the most part, they don't have to. You can record as many channels as you want without using a mixer! Just get enough preamps for every mic/channel you wanna record, and get enough inputs in your interface. (For instance, for 12 mics, get 12 preamps and an interface that can accept 12 line inputs,
or get an interface with 12 channels that have included pre-amps.) Then, once everything's recorded, you can just mix "In the Box" (ITB) meaning you do all of your mixing in your computer/sequencer(Sonar, ProTools, etc.).
So why get a mixer? The basic answer is
Routing. A mixer is basically a switchboard/control panel for audio. In it's simplest form, it just takes 2+ signals and "mixes" them into one. But almost any mixer will give you a lot more than just that. Almost any standard 16-channel, 4-bus mixer will give you:
- 8+ preamps, which as we discussed are needed to convert the mic signal to the line signal your interface might need (assuming your interface doesn't have built-in preamps)
- enough IN's and OUT's to do almost anything you'd want, signal-wise. Create a headphone mix, output to your monitors, insert outboard effects like compressors, reverb, etc. It lets you do some important things like, for instance if you're recording the entire band live as a whole, it'll let you take all of your toms & cymbals and mix them to one stereo (or two mono) track(s), so it only takes up two tracks in your sequencer(Sonar/ProTools/etc.) instead of 6+. That way, you have more channels for vox/guitars/etc. (Also, it's good to have a nice mixer around if you're gonna be doing live shows in the middle of nowhere and have to bring your own PA. Just get an AMP and Speakers and you're set!)
So basically, there are a lot of different options out there to get the job done. You can get one or more Firewire-based interfaces with or without built-in preamps, or you can get another Delta1010LT and a mixer, and use the mixer's preamps to send a line signal to the 1010's line inputs, or you can get an interface that includes a mixer, etc. It's really up to you to decide how "modular" (e.g. the ability to change/upgrade individual components; "versatile") you want your setup to be, and how much you want to spend.
It's only sitting at $99,000???????????????????????????? The current Neve console in studio D is priced at $225,000 (Only 24 tracks but vintage, belonged to Stevie Ray Vaughn)....... HMMM I should take this to somebody real quick... Maybe they can give me one, I don't think they'll need 96 channels 
