To have a pretty good understanding of what's going on, or are they really gonna go about explaining things in game just as well as they do in the single player titles? I know many MMO players skip quest descriptions and blow through content, but for the people who want to know everything, is that option going to be available? Has anything been said about it being dumbed down or not? I have a need to read anything, but I only know lore that was in Morrowind and up, and since TESO takes place forever before these last three games I'm wondering if I'm going to feel a little lost.

Need? Probably not. Would it hurt? Nope.

http://uesp.net/wiki/Lore:Main_Page

http://www.imperial-library.info/

As for dumbing down or ret-cons there has been a little bit, yes.

Like all the games, it will be easy to slide into the lore... But its still good to know a few things just so you dont make silly assumptions. We know relativly little about this time in Tamriel, so I would suggest scrubbing up on some of the Historical and Religious Lore.

Entirely up to you OP, if you enjoy reading the lore then some of it makes a real good read. I know I look things up on the web links or lore forums.

I think that most of us got our lore knowledge from reading ingame books ... that is how I have. The Codex Scientia was helpful in Arena and the Pocketguides to the Empire for the different games. Being TES, I suspect that they will fill us in on lore of the 2nd Era that way so that we may pursue it as deeply as we individually want to while playing.

But, knowledge is never harmful ... "to be fore-warned is to have 4 arms." quote - Kelly Bundy.

I think there is two ways of approaching this.

First Answer: No you will not need to know the lore but it could improve your enjoyment of he game. Go ahead and read up on sites like UESP and the Imperial Library.

Second Answer: No you will not need to know the lore and the best way to experience it is while you are immersed in the world. You'll enjoy it more if you get it in TESO rather than reading it online.

Well... I kind of disagree, one can know too much.

First you may spoil yourself for I'm sure most relevant parts of the backgrounds and lore will be explained in ESO.
It would kind of svck to hear an NPC telling you the exact same thing as you just read in a Wiki, wouldn't it?

And anytime there is a sequel or prequel to any story there will be differences in order to fit the new part of the story.
Like in Oblivion: beasts now have normal lags... don't ask why just enjoy wearing armor!
Or like in Skyrim, after we learned that almost every Nord is able to shout... well, only the player can because it's cooler that way...
Yes these might be slight thing, you wouldn't actually see if you're not into lore but... that's the point, isn't it?

If you dont wana sitt and read on the Impreial Library you can always listen to this
Its a new Lore series that a guy from Shoddy cast is doing and i found it very entertaining EVEN tho i know most of it ( and if you dont i gess you will find it even MORE Entertaining )
http://www.youtube.com/watch?v=d0Od2lbw9N4&feature=c4-overview-vl&list=PL7pGJQV-jlzCPBUy9uAXQUXZ4UBaDLKS5