To simplify what he said:
Think of it like PSOv1 & v2. You play on the same servers, interact the same way, and can even play together. But if a v2 player enters an "Ultimate" difficulty game, v1 players aren't allowed to enter.
Basically, the new stuff in FFXI will work that way. You'll play on the same server, be able to interact the same way, and be able to play together as usual. However, only CoP users will be able to enter the new areas, go through the new Missions, etc. A user without the expansion will still be able to talk to them, see what area they're in (they added a new world map for this purpose), and so on, just not join in those activities.
Items, on the other hand, will largely be available to everybody. New recipe lists for new items popped up a week or so before the expansion even came out, and some of the new stuff was available on the AH already (created through crafting). The exceptions to this, however, will be EX Items & Key Items. If any of these are gained through exclusive CoP areas/missions/what-have-you, they won't ever be available to players without the expansion; and since these aren't trade-able items, there's no compatibility issues.
Make sense?
And it's not a stupid question at all, I see this confusion pop up for pretty much every new MMORPG expansion, so don't worry about it.
