Mark,
Are you saying to treat my MobileMe as the center, the 'base', the control - so to speak - from and in which to manage all my other calendars?
In reality, MobileMe is the repository for all of your calendar data that you want to sync with other devices. If you wish to sync any data it must reside in the MobileMe cloud. When iClould is released, I presume it will serve the same purpose.
Calendars listed under the "On My Mac" heading are for local use only. They will not sync but can be published with caveats.
As long as I have one working calendar - common to my iMac, iPhone and MacBook - I'm happy.
Then you should be using MobileMe for that calendar.
Do those MM instructions apply to Lion?
Yes.
How do I delete On My mac calendars?
Select the calendar and then choose iCal>Edit>Delete.
Why are they there?
Good question. IMHO they are useless except for users who want to use the publish feature.
Last question (and I'm so grateful!), what's the purpose/distinction of and between 'regular' and 'On My mac' calendar? Do I really need them?
I have eliminated mine without adverse consequence.