What Dust Does: You should think not think of dust as obscurring light, but more as reprocessing light. When optical light hits a dust grain, the grain reflects some of the light, absorbs some, and re-radiates what it absorbs at lower energies in the infrared.
The effect is exactly what happens in our daytime sky. Because dust particles (in our atmosphere, and in space) are small, of order the wavelength of light (about a micron), the fraction of light that is reflected depends on the wavelength of the light hitting the dust grain. Bluer photons tend to be reflected more often, because their wavlength is much smaller than the dust grain. In this case the dust grain looks the way a tennis raqcuet does to a tennis ball (the ball will be reflected, but lose some energy to the racquet's strings). For redder photons, however, the grain is small compared to the wavlength of the photon; it looks more like a pole does to a wave in the ocean--the grain hardly has any effect. Thus red light tends to pass through dust, while blue light tends to be reflected. This is why we have red sunsets and a blue sky. This is also why the blue part of the Trifid Nebula looks blue, and why this nebula has a bluish look.
The description of grains and blue photons above is important, becuase the loss of energy to the grain heats the grain. The grain, in turn, radiates that heat in the infrared. At long infrared wavelengths, the entire galaxy glows with this re-radiation of star light. In fact, in certain galaxies, called starburst galaxies (like M82), there is so much dust that despite incredibly intense optical and UV radiation from within, the galaxies are lackluster in the optical, but behemoth emitters in the infrared. In sites of star-formation, our view is often obscured in the optical by dense dust disks which surround the forming star; if we look in the infrared, however, the dust disk becomes more transparent, and the central nascent star is revealed.
