First, make sure you have pretty urls turned on! Search the forums to enabled this, it is super easy.
Upon installation, visit /dashboard/url_director/settings
Turn everything on. This will start logging requests that would end in 404 Page Not Found.
Head over to /dashboard/url_director and start adding urls. Click the green button in the upper right to get started.
Please be sure to input the new url without your BASE_URL and DIR_REL, which are "http://www.google.com/rel" in "http://www.google.com/rel/dashboard/url_director/settings"
Once you have created some mappings to URLs, you can easily test them by clicking the visit link right in the dashboard. These visit links provided do not increment your url matched count.
Internal URLs are used for redirects that don't necessarily match with a page. This can be a url such as /blog/?category=not_found or a path and page controller action such as /login/logout
Wildcard matching matches paths that end in a *, such as /blog/2011/*. Any URLs after this path can still have a custom url for a particular path, but all others past this section of the site will have the action associated with it.
$_GET variable matching.
in 1.0, this add-on only matched requested paths. In 1.2, I introduced the matching of $_GET request matches, such as /blog?id=50