[I downloaded gnucleus onto my hard drive and installed it (is this the only thing I need?).]
 
Yes, it is :-) 
[When I go to gnucleus.exe I  see a connections window showing me lots of updating nodes(?), port 6346, distance ? and status 'connecting'.  It also says cache full.]
You see, gnutella is a highly distributed network with no central server, so each one has to do that by connecting to each other, transmitting queries etc. So a 'node' is a computer like yours. Ports are, so to speak, inpu/output routes, and port 6346 is default. Distance: When you search something, your query (and hits, hopefully 

 will be transmitted from node to node. So: Nodes away from you. While not connected (I mean while gathering IPs through adress servers not through broadcasted IPs) it is meaningless in this context. 
[the keyword entry bit is greyed out .]
The keyword entry will be available when one ore more connections are established. 
[after some time the cache starts to change to percentages (Cache at 76% etc and keeps decreasing).]
This is (as far as I know) a host name cache and not important for searching. 
[Then the program crashes also.]
Gnucleus crashes sometimes, admitted... 
 
 
[How do I connect and get to share files? I have never used Gnutella b4.]
It is very important to make connect - without no searches. You have to be a bit patient while starting - allow 2 min or so. Biggest goal is to catch one connection, others will follow fast then. You could also get start IPs from elsewhere (look into the threads here; there are mentioned plenty); cut and paste them, and do not forget the port number (again: def. 6346). If you are using a firewall, configure it appropriate. 
Fell free to ask more, if needed 
 
  
Greetings....