Ok, here's how it works, Lidstrom is a good example: 

The rankings next to the values correlate to our league scoring rankings.  So to look up a player go to our league on Fantrax then to Players and sort by Fpts (it should be sorted by Fpts by default).  You need to check both the 10/11 ranks and the 09/10 ranks.  Lidstrom ranks 6th amongst D players in 10/11 and 10th in 09/10.  The higher ranking is 6th and this is what will be used.  Now go to the extension values under Defensive players and look up the 6th rank player.  The extension value is $6.4M.  Lidstrom's actual contract is for $6.2M so his extension in DNHL is quite accurate.  It won't always be perfect but should generally be in the ballpark. 

Now you decide on his contract length.  The contract limits are as follows:

<= $1.4m, 2 years
$1.5m - $5.4m, 3 years
$5.5m - $7.9m, 4 years
>=$8m, 5 years (the overall limit)

So Lidstrom can be signed to a 1, 2, 3 or 4 year deal.  He cannot be signed to a 5 year deal as the yearly salary has to exceed $7.9M to qualify for a 5 year deal. 

The $6.4M extension is the yearly value.  So no matter how many years you sign him he will earn $6.4M per year, not that amount divided by the number of years.  This might be confusing as compared to free agent bidding where all bids are for total contract value.  If you win a free agent bid at $6.4M you can sign the player to: 1y @ $6.4, 2y @ $3.2 or 3y @ $2.1.  A $6.4M FA bid cannot be broken down to a 4 year since a 4 year deal needs to exceed $5.4M per year.

Make sense?