I'm just taking a stab at this. Art's question is far from stupid!
Although I thought that adding students to the top level would make them students in all courses, this doesn't seem to be the case. Nevertheless, this is not a satisfactory solution since one would have to explicitly add students to the front page everytime new users are added to the site.
It is possible to add the students directly to a specific activity using the "roles" tab in the activity set-up, but for the same reason as above, this would not be an optimal method.
What we really need, at least at the top level, is a choice in the set-up that grants
permission to anyone who is logged on.
By the way, once a method is discovered to do this, or anything else, please add it to the FAQ at the bottom of
http://docs.moodle.org/en/Manage_roles. This might not be the optimal location for this FAQ but it can be moved elsewhere if the management prefers it elsewhere.