It'll automatically start recording and stop when the ignition goes off. It'll delete older files as space fills up, but keep an eye on it as once the card fills up with "protected" files that it can't delete, it won't be able to loop and it'll basically be useless - I don't know if it warns you if this situation occurs, though.
You can set it to record in 2 minute, 3 minute or 5 minute intervals. I always leave mine on 2 minutes, just so I don't have to scrub so long to find the bit I was interested in.
The record button is to stop recording (and then start again) or to take a photo when in Photo mode.
The red button in the bottom left "protects" the current file from being erased in the looping procedure. You'd press that if you witnessed something on the dashcam that you wanted to keep for whatever reason, but in certain circumstances it'll automatically protect a file - basically if the car accelerates/stops suddenly, tripping the G Sensor.
//edit: One thing that's very important, and that very few people realise. If you are driving the car and the screen is on, with the video showing, and is visible to the driver, you're breaking the law. In the options menu, there's a "Screen Saver" option - set this to the smallest time period (10 seconds I think?) and the screen turns off after that time - it's still recording, but you're no longer breaking the law. Just bear in mind that, with the screen off, if you want to "protect" a video file, you need to press the bottom left red button twice - once to turn the screen on, once to protect. You'll know when it's protected it because a red padlock will appear on the screen, in the middle.
//edit2: Also, if you can, consider going to Halfords or somewhere else suitable and getting them to hardwire it for you. It'll be around £50 (£20 for the hardwire kit, £30 for the install) and they'll hook it directly up to the car's power and put it on the windscreen for you, and hide all the cables as best they can. It's very neat when done, and saves all the hassle of having to remember to take it with you, take it out of the car etc. and also frees up your USB port.