I would like to generate a form where people would enter a SKU number and the form would automatically grab the description from our SalesForce Database. How can I do this?

An alternative solution is to create a force.com site to house your form. That way you don't need to use SFDC licenses. The downside is you have to create the form using Visualforce and depending on the type of SFDC org you have you will have limits on the number of sites you can use.