I believe nel is (in + il) and nello is (in + lo)

For an explanation on "lo" see the link below:

http://www.bbc.co.uk/languages/italian/language_notes/il.html.

Also, here's a chart of how all the prepositions are formed:

http://www.bbc.co.uk/languages/italian/language_notes/al.html

I'm new to Italian too, but knowing some French helps pick up some of these concepts. Hopefully someone with a higher level can clarify.

al = to the nel = in the I'm new to Italian, but I think this is correct

It is the verb " to be " I know spanish and it's very similar