Google Stored vs Linked Custom Search Engines

It’s been a few years since I’ve played around with online advertising and search engines, and I’m a little confused.

I already have Google AdSense on my websites. I began upgrading my Google search pages to Custom Search Engines when I realized I could just use a PHP include to display a search box on every page on my site.

But I quickly got lost when reading the fine print. Take this page, for example -

Can anyone explain, in explain English, what “stored” and “linked” search engines and “annotations” are all about? Or can you point me to a tutorial? I’m just missing the big picture.

Another question: When you create a custom search engine, you can paste in multiple URL’s, so I could allow visitors to search all of my websites at the same time. Cool. But does anyone know if I can include links to websites I don’t own?

For example, imagine if I wanted to let visitors search my site and Wikipedia and Apple’s website at the same time:

Would that be legal? I’m assuming I’d still collect royalties whenever people using the search engine click on an ad, though I realize I’ll be out of the loop if they actually click a link to Wikipedia or Apple.

One thing that hasn’t changed is Google; I’ve been looking at their tutorials and posted a couple questions on their help forum the other day, but I haven’t received any feedback yet.

Thanks for any tips.