I'm not HH, but I have an H in my name, so I'll bite.
A player can end up on a 25 man big league roster by being recalled or by having his contract purchased. If the player is on the 40 man roster, the player is recalled; if the player is not on the 40 man roster, the club purchases the contract because the club has to add a player to the 40 man roster in order to have him on the 25 man roster.
What goes up can go down. When a player still has option years available and the club wants to ship him out but keep him on the 40 man roster, the club "options" the player down-when that club wants that player back, that player is "recalled." If the player is out of options and the club wants him off of the 40 man roster, the club has two options: the club can designate the player for assignment or the club can send the player outright to the minors. However, the player who is on the 25 man roster must clear waivers before being removed from the 25 man roster.
Being DFA'd means that the club has 10 days to trade the player or release him. But it frees up a spot on the 40 man roster from the minute of being DFA'd-and that is the important thing because it allows a new player to be added to the 40 man roster immediately (this all assumes that the 40 man roster was full at that time), rather than waiting for the player to be released after clearing waivers.
Frequently, a player whose contract is purchased is an older starting pitcher, like Jose Lima for the Mets this year. If he doesn't work out, like Lima, he's outrighted back to the minors. The rules on outrighting are a little gummed up by the fact that the player can only be outrighted once without his consent.
For more on DFA, see
The Link