Hi, I'm a little late to the party but I have experience deadlifting and I have congenital and degenerative problems with my back so I can share my experience.
deadlifting shouldn't hurt your back (barring any kind of physical problem that would make doing this exercise harmful). Deadlifting is a very natural movement for our body. The key is properly,
which means absolutely textbook perfect form. Also, I used a trapazoid bar so I didn't have to worry about dragging a bar up my shins and by the nature of its very design it promotes good form. I read that the trap bar was designed by one of the record holding deadlifters and was actually what he used when he wasn't competing. It worked for me because I was training at home and could go out and purchase the bar for myself. Not all gyms have a trap bar.
You have to start out light with deadlifts for a few reasons. First to get your form down and second because they are a highly demanding exercise. You may have NO problem lifting heavier but that doesn't necessarily mean you're ready to do so. Empty bar weight is plenty to start with (whether you're lifting an empty 8' Olympic bar or a trap bar they're both about 50 lbs). As to the mechanics of how
to deadlift, there are tons of sites that describe or demonstrate deads. I would point you to http://www.stumptuous.com/
under the menu for Training there is a section entitled From Dork to Diva. You will find detailed instructions for "classic" tried and true weight training exercises, coupled with step by step photos and a video. I love Krista's approach, very detailed and very practical.
Another note about form, you need extra eyes when you are learning, whether those are mirrors, video, another person watching you (or all of the above).
As for what deads can do for your body ... put it this way, any bodybuilding exercise you do is enhanced by doing big compound exercises. You want abs, deadlift; you want biceps, deadlift, etc., seriously (or squat, whichever, but I didn't want to buy a squat cage).
And regarding my back problems and deadlifts, I hit a limit and couldn't lift any heavier. My legs could have done heavier weight easily but I got a pain in my lower back and hip that was undeniably a warning. As long as I stayed below that pain threshold I was able to deadlift and actually my back felt the best it ever felt because my core was stronger than it had ever been.