The DNA of a cell resides in its nucleus, and contains the blueprint, or set of instructions, that is needed in order to reproduce itself. Genetic Engineering is a process, that in some way, alters one or more of these instructions. The most common application involves discovering the gene/genes that are responsible for a particular affliction, then finding a way to change this gene/genes back to its desired state, so that when the cell replicates, it will reproduce itself correctly, without causing the afforementioned affliction.

There is research occurring now to use this method to end hairloss. First, it involves finding out what genes are responsible for baldness, and then somehow trying to fix those genes, so that baldness no longer occurs. When, and if this becomes a reality, it seems likely that it will be of great help, for those people who are not yet balding, but who carry the genetics for it, so will experience it later on. It is a little more dubious how well this will work for people who are already balding, at least in respect to the areas that have already lost hair.

Cloning is a very specific subset of genetic engineering. It typically involves removing an egg cell from species A. The DNA is removed, leaving all the other cellular mechanisms intact. The DNA from Species B is extracted, and placed into the egg cell of species A, which earlier had its original DNA removed. The egg cell, now carrying the genetic instructions of species B, is then let to grow, usually by inserting it back into species A, but theoretically could be done outside the womb, in a laboratory. The main thing to understand is that you are taking the DNA of what you want to reproduce, and then using some technique to create an embryo from it.

This is just a very, very basic understanding. There is all kinds of information one can research, to obtain a much more thorough understanding, should you choose to do so.