Annual Passes are what it says on the tin - 365 days access to the parks. (plus water parks, DQ and PI for the Premium Annual Pass)
You can buy the passes over the phone direct from Disney. You receive a bright green voucher that you exchange for your actual pass at any Guest Relations window either in the parks or DTD. Your year starts from when you exchnge the voucher and activate the pass. You don't need the AP or voucher to get the discounts when booking, but you may be asked for them when you check in.
I would recommend using DreamsUnlimited to book your WDW accommodation. They provide an excelent service and will apply the AP rates to your booking for you:
I think the DVC discount is around 20-25% but is not available at all times and ONLY on DVC properties; so maybe on Villas at Wilderness Lodge but not the Lodge itself.