The most likely cause of the problem is that you bought a plant out of a greenhouse, and then put it immediately outdoors. Plants have a funny ability to grow according to the prevailing environmental conditions, and when you grow them in greenhouses, they get very "soft" and their tissues fail to conserve moisture because they don't need to--the humidity is already very high.

Then if you take a plant that was grown in a greenhouse, where humidity is very high, light diffuse, and ventilation very gentle (no wind), and put them outdoors where humidity is lower, light levels more intense, and there is now wind to deal with, they are apt to shrivel.

What you're supposed to do is called "hardening them off". You leave them out only a few hours in mild weather in a sheltered spot, then longer, then move them to a more exposed spot, and eventually, when they seem to not be too stressed, leave them in their final position day and night.

There are other possibilities too. What is the weather like? Any fungal diseases in your area? Thrips? Whiteflies?

>>How much light and water does it really need?

Bright open shade, with perhaps a few hours of sun, is about the right exposure. Morning sun is better than afternoon, unless you live in a particularly cool area, in which case it doesn't matter too much.

They can bloom with nothing but bright open shade (open to the sky but no direct sun) if you like.

You will need to irrigate daily in hot weather (which is why I don't do hanging baskets). In cooler and/or more humid weather, once every few days should be adequate. Fuchsias are heavy feeders--which is not surprising as they bloom frequently. Feed fairly often with a liquid fertilizer when you irrigate.

Let me know if I have given you enough information to solve the problem. If not, I'll ask you some more questions.