Can someone explain record releasing?

I know that a band releses an album and then releases singles off of that, but how does it work, really? What is the process? How many singles need to be released off an album and what not.. and what about EPs? Like Mellowdrone doesnt have any albums yet, they have just been.. releasing stuff!

I'm curious here, and don't bitch at me, I did google it and found nothing.

Thanks~

this is MY understanding of the process...

you have a band and write some songs, play a few shows, etc.
you decide you like the material you have, so you decide to rent out a studio and record a few songs to make your demo. after recording is done, you make a few to give to your friends and send to record companies.
 
you keep on writing good material, playing gigs, getting money to buy better equipment, etc...

hopefully, the record company will call you back saying that they liked your demo and that they either want you to play a show for them to see how good you look, or just sign you to their label right then.

you then either go right to recording all of the awesome material you have been writing for an album to release it to the masses, or record a limited release EP to see what kind of response your music gets. if the EP response is good, you get your album!

EPs are also released by established bands just to have something out between albums to please hungry fans (for example - Radiohead's Iron Lung EP in between Pablo Honey and The Bends).

hope this helped.