Huh, where to start.
I will assume you know quite a bit already, you've been around blender longer than I.
You will need to set up your shape keys, properties>objectdata>shape keys
click + to add your basis (basically your starting point)
click + again to add key 1
go into edit mode change key one to what you want it to be.
Now animating your shape key
This is where I got hung up at first, open the dope sheet and change it to shape keys. Here is where all shape key animation starts, just select your frame and make your key adjustments (slider), blender will auto-majicaly insert a key frame wherever in the timeline you adjust shape keys. No baking necessary just export the finished object(s) like normal. Some good tuts out there. All I know came from a few you tube videos last night. Look into f curves and object drivers too.
Now here's is where the excitement begins. Baking physics based animations to key frames. I won't get into yet, cause I don't enough myself, but it does work, I've tried it.