|MadSci Network: Physics|
You have it basically correct. If you remove an electron from the innermost orbital (the K shell) of an atom, it is replaced by one from further out. Exactly which electron drops down to replace it is, as all things in quantum physics, a matter of probability. It is very likely to be an electron from the next shell out (the L shell), which is then replaced by one from further out, and so on in a cascade as the atom finds its way to minimum energy. Eventually, the missing electron is replaced from the environment.
The cascade that I just described does result in numerous transitions, each with less energy than having an electron drop from straight from the highest level down to the K shell. They're not necessarily "low energy," though. For heavier elements, the inner electrons are bound so tightly that even transitions from the L to K shell result in x-ray photons.
The transitions may not always result in photons being emitted. In some cases, the energy involved in dropping to the K shell from, say, the L shell is sufficient to liberate another electron from the L shell. As a result, as one electron drops to the K shell, another may escape from the atom, ionizing it further (the Auger effect).
A somewhat dated, but fairly clear description of the process is given in "The Theory of Atomic Spectra" by Condon and Shortley. I believe that there is also some discussion in "Quantum Physics," by Eisberg and Resnick.
Try the links in the MadSci Library for more information on Physics.