Meaning of double --/^^/## [duplicate]

Question

\catcode`| = 13
\def|{\item {--}}
\def\itemize#1{{\leftskip = 40 pt #1 \par}}

\itemize{
| First item
| Second item
}

The above example from Latex Wikibook and I do not know what functionality {--} in the itemize provides. Does it have a special meaning?

Also I am confused about the double caret (^^) notation used at the beginning of the Catcodes section such as ^^K for superscript.

In another example there is a nested macro which is added below. It is said that double macro parameters ##n expand to #n, is this always the case?

> %% Required package.
\usepackage{ifthen}

%% TeX function that generates the language commands.
\def\localedef#1#2{
  \ifthenelse{ \equal{\locale}{#1} }{
    \selectlanguage{#2}
    \expandafter\def\csname#1\endcsname ##1{##1}
  }{
    \expandafter\def\csname#1\endcsname ##1{}
  }
}

%% Selected language. Can be placed anywhere before the language commands.
\providecommand\locale{fr}

%% Language commands.
\localedef{de}{ngerman}
\localedef{en}{english}
\localedef{fr}{frenchb}
%% ...

It is good that this page is comprehensive in the sense that a lot of topics are mentioned; however some subtle points are not explained lucidly. I think I should refer to some other source maybe TexBook to better understand the inner workings of TeX. Is there a introductory level short tutorial on TeX that I can use before consulting a more advanced source?