All information about extensions provided on this and subsequent pages applies to Daisy releases after (not including) 1.3-M2. See the Daisy 1.2 docs for extensions in earlier releases.
The Daisy Wiki has some hooks to add your own functionality. You build extensions by building on top of Cocoon and making use of the available Daisy repository API (plus extension components such as the navigation manager and the publisher). To develop extensions, you don't need a Java development environment or knowledge, though you can if you want. The Daisy Wiki contains some samples to get you started.
Some examples of what you could do using extensions:
Daisy Wiki extensions are, just as the name implies, just extensions to the Daisy Wiki. If you want to develop a completely custom site, it is better to start from "scratch", albeit reusing some basic groundwork for interacting with the repository server and getting pages published. We are still working on providing a solution for this though, so in the meantime you can get allong using the Daisy Wiki with skinning can extensions.