No you don't interact with it through the start button. It places interactive objects on your desktop. These can be smart icons that are antimated objects, panels, and so on, that perform some sort of functionality.
You can build your own StartMenu or TaskBar or SysTray. Sort of like a wharf in LiteStep.
Desktop objects can be grouped together so that a parent object can control children objects. DesktopX also allows you to specify behaviour for these objects such as launching apps, showing favorites, showing/hiding other DesktopX objects. There's a whole bunch of commands you can give to DesktopX objects.
It does has an API and there are plugins/modules
that folks have developed. There are plugins for controlling winamp and displaying its playlists. Modules exists for CPU/memory monitoring, clocks, and so on.
I imagine there are currently more modules for LiteStep since LiteStep has been around alot longer.
The thing I like about DesktopX is that its object/modular structure allows you to easily modify the desktop through the GUI.
IMO, it's much easier to get started with DesktopX then LiteStep, though I think folks are now starting to make LiteStep distro's that are aimed at easy installation.
Sorry if this seems like a sales pitch for DesktopX