@pdcjlw1: A reference is just that. It's a pointer to another memory location where the data is held. Here's a good article on references. It's very old, but from a cursory look it seems like the concepts are still valid.
An example of a method that instantiates a variable is somewhat simple. First you create the reference in your main class.
Dim joe as Guy
Then you have a method that creates a Guy object. Maybe it gets the data from a database or some other source:
Dim tempGuy as New Guy()
tempGuy.Name = "Fred"
tempGuy.Age = 42
tempGuy.IsAwesome = True
Then in your application somewhere you can put the result of that method into your empty reference like so:
joe = GetGuy()
Remember that VB can both create a reference and fill it in one line like this:
Dim joe as Guy = GetGuy()
EDIT: davewill pointed out that in VB only functions return values. I've edited the code for clarity.