I'm sure there are clearer and more detailed explanations available by searching, but I'll try to explain:
As an example, an 8 address block could be defined as:
The /29 defines the number of bits of the 32 used by IPv4 that are 'masked' by the network. (the mask can also be expressed as 255.255.255.248). This leaves the last 3 bits usuable for hosts. If you can remember your counting in binary from school, this gives a maximum of 8 permutations - hence the 8 addresses available, which in this case would be:
For every block defined by a netmask, the first & last (or highest & lowest) addresses have reserved uses.
The first (lowest) address is the network identifier and the last (or highest) is the broadcast address.
So for our example:
192.168.0.0 is the network address.
192.168.0.7 is the broadcast address.
This leaves 6 addresses usable for hosts.
You will need one address assigned to the WAN interface for your router, leaving 5 for other things.
Eats shoots and leaves.