"What I'm a bit lost with is what is a .desktop file and how to create it"

No problem, kudos1uk. A .desktop file is one that defines items in the menus (it probably does other things as well). Just go to the "/usr/share/applications/hildon" directory and have a look at the contents of some of the others there, using more. I used vi to edit the file. As soon as you finish editing the file, it will show up in the Extras menu.

btw you don't need to copy it to the /etc/others-menu folder. That was an unnecessary step, and I'll remove it.