Hiding Mountains of Debt in Wall Street?

Here's what I want to know more about. What about this "hiding mountains of debt in complex instruments?"

It brought down Enron and others. Is that what the "mortgage backed securities" were all about? This is Fareed, in Newsweek:

If there is a lesson to be taken from this crisis, it's a simple and old rule of economics: there is no free lunch. If you want something, you have to pay for it. Debt is not a bad thing. Used responsibly, it is at the heart of modern capitalism. But hiding mountains of debt in complex instruments is a way to disguise costs, an invitation to irresponsible behavior.

And, excuse me, but could someone please explain to me how a "derivative" in the sense used here and on Wall Street, differs from a worthless piece of paper sold to an unwitting investor with knowledge it had no intrinsic value or economic basis in equity, meaning something of tangible value such as an asset. Is a derivative something derived from a mortgage, but not a piece of the pie?

Am I right on this, or what? These were never worth more than precisely zero? How could they have been purchased? Zachary Karabell in Newsweek:

... Absurd though these all were, they paled in comparison to the financial innovations that grew out of the mortgages—derivatives built on other derivatives, packaged and repackaged until no one could identify what they contained and how much they were, in fact, worth.