Well, A lot of questions to answer at once. But here we go.
The portal would be the link in the header that states "Portal Page'
Which can be somewhat different than the forum page.

This site has starting from the top left down then right top down.
Site links = custom island
Whos's online = canned island
Featured Member = Canned Island.
Top Posters = Canned Island
Latest Photos = Gallery island

Right Side
Shout Box = Canned island
Calendar = Canned Island
Today's Birthdays = Canned island
Recent Topics = Canned Island
Forum Stats = Canned Island
Random Image = custom Island

ok, and then what makes the forums come up in the middle?

is that 6 post islands? or just one?

Go to cp-> portal settings and select the forum(s) you want to pull from

Thanks Gliderdad, got that.

The other thing I am stuck on, is that it implies that I will expose private forums, by including them in islands....?

Yes, the recent posts and latest topics ignore permissions so be careful which forums you allow to be pulled in. Hopefully that will be a feature down the road.