Okay, I'm more of a visual person, and now that I see how it works, I understand, at least this part of it...
So, the microcontroller sends the information to the shift register, 8 bits at a time (each time he presses 'clock' is 1 bit), based on the 1 or 0 that is in those 8 bits, determines which LED is turned on. Then, the microcontroller sends a latch command (sends that pin to high), and those LED's that had 1 as the byte come on. It all happens so quick, that all the LED's that are suppose to be on, while others shift off, don't flicker to the human eye.
However, I'm concerned with this. If the optoMOS flickers, even though I won't be able to see it (even if I could see inside the optoMOS), it could turn off/on rapidly whatever is turned on/off with the optoMOS.
So, I need to know how to solve that problem, perhaps a small cap (0.01uF) on the gate of the optoMOS?
So, I understand how that works. The microcontroller can read the program and check and see if certain inputs are high or low, and assign the proper bytes to the shift register to turn on the correct LED's. Easy enough, I just need to understand how to do the programming.
However, what SL4P says about all the inputs on one (or 3 shift registers in this case, 8 sensors times 3 inputs each with an extra for Reset LED Switch, which can be on its own microcontroller output) shift register confuses me. I don't understand how that works.