Hi, well in your case to be safe you would only really only need to focus on either hiding all of the fields initially until the event fires or leaving all of the fields visible initially and hiding some based on a field response.
To answer your questions...
Which 'Question' does the event get placed on? - This is the field that you want to 'Trigger' the response. For example if you have a combo box named 'Color', with 'Blue', 'Green', 'Red' as options you would choose that the field 'Color' would be the postback question (initiation question). Then, any of the colors would represent the initiation response (i.e. Blue). So that is saying that when the user chooses an option from Color if they select 'Blue' its going to fire this question response.
What does the event do? Well the affected questions are going to be the question(s) that are actually affected when the user chooses 'Blue' from the 'Color' dropdownlist. In this case you would want to choose the event type to unhide questions that were previously hidden. Whatever question(s) you want to have visible select here.
Finally, there is a 3rd step because you are wanting to un-hide fields that were previously hidden event type you have to make that field initially hidden. In order to do this you need to specify for each field that you want to initially hide under the 'Advanced Field Properties' for each field under Manage Questions. There is a setting, 'Hide field until forced visible by question event' that you need to check.
You don't need to worry about the affected question new default value, this is only needed for a different event type.
If you have set it up as below and its still not working let me know and we can debug it further.
-Chad