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How does this work?  In the deep strike entry it states that the unit cannot move or assault the turn it arrives but can shoot normally.  Does this mean the drop pod doors lower and the dreadnought effectively shoots from inside the drop pod?  I feel like an idiot asking this question - as Im sure the answer is more obvious that this.

The unit is allowed to deploy from a Drop pod (2" . Just like any other transport.

This is all the movement that unit is allowed.

It can then fire all the weapons it's normally allowed to but still counts as moving.

This doesn't have an adverse effect on your dread but would affect a unit carrying a heavy weapon.

Hope this helps

Yeah, just to add on what Brother Bartius said, as long as any of the Dreadnought's base is withing 2" of the pod, it's legal to put him there. However, sometimes it's beneficial to keep the dread's armor 10 back right up against the pod. Those 2" are nice though when you got a heavy flamer you're trying to angle.

In fact, you MUST deploy when the drop pod lands. You may not stay inside it.