Susan, you have a wealth of info here from Arte and Harold and your set on the question of Illo notes. I just wanted to help clear up your mention of confusion over what you've heard.
>Then I hear the complete opposite where they want writers that can illustrate their stories. Which I don't do both, I just write. See my confusion?<
Read that information this way, Publishers (and many Lit Agents) like finding "Illustrators who can Write". So if your a Writer, not an Illustrator, that doesn't pertain to you and you can happily ignore that bit:)