Dream catchers were actually made by Native Americans as a charm for babies' sleeping places to keep away nightmares. The feathers moving from any breeze also entertained the baby while falling asleep. They were made from bendable branches and sinew. The story is that the web catches all dreams. The good ones rain down from the feathers, and the bad ones get caught in the bead on the web. In the morning, the bad are either blown away by wind, or burned away by sun.
As far as knowledge of the different woods, I believe there is one, or more, thread about them on here. Using the search bar will help.