Yes, Ken both the water and the milk would be expressed as a percentage of the weight of the flour. (just like the yeast and salt)

I understand that the liquids will need to be calculated as percentages, but does that mean that is necessary to calculate a separate percentage for each one, or can the TOTAL amount of liquid be expressed as one percentage?

I guess what I want to know is:

If I have a recipe that calls for 3 cups of flour and 1 1/2 cups of water, the amounts can be expressed as percentages. If I decide to replace half the water with milk (ie 3/4 cup of each, giving the same relative percentage of total liquid), would there be a significant effect on the recipe?

Or, does substituting milk for some or all of the water in a given recipe significantly affect the % hydration of the dough?

I hope my question makes sense - as you can tell, I'm just beginning to get a handle on this stuff!

Ken