No, Launcher Pro is a home launcher. It's an app that runs when you hit the home button. If you look at your system apps, there is an app called Home. That's the default launcher. There are a bunch of different home launchers you can install to give your home screen a different look and feel.
Here's a big list of them.
A ROM is an operating system. So custom ROMs can make drastic changes to your phone. They can totally bork your phone up if you're not careful, forcing you to install the stock ROM and wiping your phone back to right-out-of-the-box condition. Thus the reason you always read "not responsible for phone damage" and "backup your phone" in most every guide.