xl97:
Being a complete noob.. and trying to learn to read/understand schematics a bit better..but how do you know what TYPE of capacitor to use?
Even professional engineers with years of experience don't always know what type of capacitor to choose, so don't feel bad. There are rules of thumbs out in the industry that engineers follow which aren't true or aren't true anymore. When it comes down to it, there are a lot of "it depends" conditions for choosing the right cap.
I've been meaning to write an article on "Capacitors for Hobbyist."
BTW, most hobby style projects can get away with just ceramics. If audio is a concern, use C0G / NPO type ceramics.