You will need to setup an account with Paystation. See http://www.paystation.co.nz for more information. Once you have an account, you will be provided with a Paystation ID and a Gateway ID. Both of these must be entered into the payment method's configuration, which you would do through the ecommerce dashboad, like any other payment method.
Unlike a lot of other payment methods which generate their own return URLs or IPN URLs, Paystation require you to notify them of the two URLS you will use. These are shown in the ecommerce dashboard when you configure the payment method.
The first URL is the "Post Back" URL. This URL is accessed by Paystation's servers, not by the client browser. As such, it is the one that is used to update the order and mark it as authorised. It is essential that this URL is accessible from the web.
The second URL is the "Paystation Return" URL. The user's browser is redirected to this URL after the card details have been taken. Again, this should be accessible from the web.
The addon has a test mode, which when activated allows you to use test card numbers to prove the operation of the cart. You can also set various payment responses - the response is detemined by the cents value of the transation, so in order to test, the actual payment amount is altered to match.
There is also a debug facility, which will log all responses from Paystation and provides diagnostic information.