What populates the "Best Selling Products" area on the dynamic home page? I've given it the title "Customer Favorites". But the products that are coming up are nowhere even close to the actual best-selling products in the store.

The Best Selling Products will list the products by the Sales Rank, which is really just the count of the number of sales. In the ECT Admin Products page there is an option to Recalculate Sales Rank (in the "Select Action..." menu). There is also a parameter...
$bestsellerlimit=60;
...which display the best sellers in the last 60 (in this example) days.

Vince

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Oh, thanks - I'd never seen that option before! That worked great!