What is Challah?
(י) הנוטל שאור מעיסת חטים ונותן לתוך עיסת ארז, אם יש בה טעם דגן חיבת בחלה. ואם לאו, פטורה...
(10) One who takes leaven from dough of wheat [flour] and puts it into dough of rice [flour]: if it has the taste of grain, it is obligated in Challah; if not, it is exempt...
(7) If one makes dough from a mixture of wheat and rice, and the dough has the taste of the grain, it is obligated in Challah, and a person may use it to fulfill one's obligation of Passover. But if it does not have the taste of the grain, it is not obligated in Challah, nor may a person use it to fulfill one's obligation on Passover.
So what does go into Challah?
(ז) שעור החלה, אחד מעשרים וארבעה. העושה עיסה לעצמו, והעושה למשתה בנו, אחד מעשרים וארבעה. נחתום שהוא עושה למכור בשוק, וכן האשה שהיא עושה למכור בשוק אחד מארבעים ושמונה.
(7) The minimum measure of Challah is one twenty-fourth [of the dough]. If one makes dough for oneself, or if one makes a dough for his son's banquet, [then the minimum measure is] one twenty-fourth. If a baker makes [dough] to sell in the market, and if a woman makes [dough] to sell in the market, [the minimum measure is] one-forty eighth.
What is this blessing the naked people can, or can't, say?
Ba-ruch a-tah Adonai Elo-hei-nu Melech Ha-Olam asher kiddi-shanu b'mitz-vo-tav, v'tzi-vanu l'ha-frish challah.
To answer the first question:
Challah is a portion of a batch of bread dough given to a Kohen (priest, pl. Kohanim) which becomes holy upon separation, and can only be consumed by Kohanim or their household