Clarification of lightning network example (putting funds into lightning)
So in the first step you make a regular transaction from your address A to our common 2-2 address C, and I make a regular transaction from my address B to our common 2-2 address C?

Yes, although in the current lightning spec and implementation, only one party funds the channel. However it could certainly be both parties that fund it.

I have one key of this 2-2 multisig address C and you have another?

Yes.

Address C now has 1BTC.
Now from this address C I return 0.5 of its 1 BTC to your address A and sign with my key, and you return remaining 0.5 to my address B and sign with your key?

Two transactions are formed at this point:

one that you make and sign and send to me that gives 0.5 BTC to you and 0.5 BTC to me,

one that I make and sign and send to you that also gives 0.5 BTC to you and 0.5 BTC to me.