How do I create customer/order relationship with entities? I am fairly new to Drupal 7 and especially new to the entity concept.
I need to create a site which records customer data (name, address etc) as well as other objects/entities such as orders, which are related to the customer with a parent/child relationship. I don't know how to do this in Drupal 6 and definitely not in Drupal 7. I know you can create a node reference as a field, but that is not what I want.

I'm pretty sure this has to do with entities, as entities are paralleled to objects, and what I really need is an object to own another object. I am presently listening through tutorials about Entities, but can someone point me in the correct direction to see what exactly I should be looking for (and to perhaps clarify the Entity concept to me).
You should look at Drupal Commerce, a suite of modules that sets up e-commerce in Drupal.  You will have a much easier time adapting Drupal Commerce to fit your needs than you will writing a store from scratch in Drupal.