/dev/sdb1 is a device file (probably for the first partition of your second SATA drive, but may depend on your
udev configuration. It is a handle to your partition as a physical device. Reading from it will get you
raw data from that partition, including formatting and other filesystem stuff, as fragmented as your data there happens to be (usually not much on linux).
/mnt/lfs is a directory in your
filesystem hierarchy. That's where you
mount the partition. That will make the
logical structure (hierarchy files, directories) stored on that partition, appear in your filesystem as if those files and directories were in the
/mnt/lfs directory.
export $LFS=/mnt/lfs will create an
environment variable called
LFS (because
$LFS is faster to type than
/mnt/lfs).
export makes sure that all child processes of your shell will inherit this variable. So, whenever you type
$LFS in your terminal, the
shell will replace it with
/mnt/lfs.
If you are not familiar and comfortable with basics of unix, shell scripting, partitioning, compiling and installing programs using GNU tools (
configure, make, etc.) I would advise that you spend some time studying those before you try to build
LFS.
This site has a lot of interesting information to learn (So does LQ.org, of course

). The process of building
LFS will take you down a road where you will encounter things much more complex than this and while you can probably build the system successfully without having a clue about what's going on just by copy and pasting commands from the
LFS manual, you would probably not learn much by doing so. And learning is the main point behind building
LFS. Also, an unfortunate mistake can easily destroy your data, if you have another system installed on that computer.
Anyway, good luck with your linux experience.