See this tutorial for details on setting up MAMP on your mac:
http://www.webassist.com/tutorials/Set-up-a-test-server-on-Mac-OS
This tutorial will help you define the site in Dreamweaver:
http://www.webassist.com/tutorials/Define-a-dynamic-site-in-CS5
And this tutorial for creating the Database connection:
http://www.webassist.com/tutorials/Create-a-PHP-database-connection
See this tutorial for the basics of getting started with Databases in Dreamweaver:
http://www.webassist.com/community/tutorials/view_tutorial.php?tid=104
you ask "Where is the local database supposed to reside?", don't think of the database as a physical file that you access through the Mac Finder, instead, you access the database through dreamweaver by using SQL (Structured Query Language) recordsets, insert, update or delete statements.
The database is also accessed using GUI Tools like phpMyADMIN, Sequel Pro, Heidi SQL just to name a few.
to move the database from the local host, to the live server, you would use phpMyADmin (which is a part of the MAMAP package) to export the tables, then import them to the remote database using phpMyADmin which is available through the 1and1 control panel for your site.
we don't have a tutorial specific to this, but you can find plenty of information on it through using google.
