I would agree that boltman covered it well...
But the only caveat to his detailed description is that local ordinances now take precedence over the federal rules IF THEY ARE MORE RESTRICTIVE. When I first got my FFL there was an ordinance that said you couldn't do business out of your home in my city. The FFL rules had no such restriction, and BATF told me they could superecede the local restrictions as they were a federal agency. One of the changes that Klintoon pushed through was that all local ordinaces had to be adhered to to pass muster on the FFL clearance. That put me out. I would guess that boltman's local ordinances are being met by him having the dedicated shop. That didn't work in my city (sigh).