Essentially, you put text in the top box, check some radio boxes, and press the button to your heart's content. But maybe you'd like more information than that.
If you're just looking for a neat setting to get started with, my go-to is "Shuffle Lines" + "Burroughs-Gysin (preserve word breaks)". I use the others in specific situations.
Maybe you'd like a sense of how you can make use of this. It's really up to you, of course, but I can at least tell you how I use it. Mainly, I think of the input box as a place to build an atmosphere—I often like mixing very technical and very emotional language, for instance. Sometimes I use my own writing, other times I wander around the web collecting, sometimes both. Then when I make the cut-ups, I read through my results and try to pick out short phrases that catch my eye, and then arrange them or use them as a springboard. But I'm sure you can come up with other ways to use this tool.
William Burroughs wrote an essay about cut-ups which I think is wonderful and inspiring. "You can not will spontaneity. But you can introduce the unpredictable spontaneous factor with a pair of scissors…Cut ups are for everyone. Any body can make cut ups. It is experimental in the sense of being something to do. Right here write now…Cutting and rearranging a page of written words introduces a new dimension into writing enabling the writer to turn images in cineramic variation. Images shift sense under the scissors smell images to sound sight to sound sound to kinesthetic."
Here is a list of each of the settings and what they do. Checking multiple boxes applies all the techniques selected in a random order.
This takes all the words in the input text and orders them back-to-front.
This puts all the words in a random order.
This paginates the text internally and then puts the resulting lines back-to-front. It's as if you printed the text onto a page, cut out each of the lines, and put them in reverse order.
Same as "Reverse Lines" but the lines are put in a random order instead.
Burroughs-Gysin (ignore word breaks)
This is a cut-up technique discussed in the aforementioned essay. It's as if you printed the text onto a page, cut the page into quarters, and then rearranged the quarters. It slices through the middles of words, so you will get some new words with this method.
Burroughs-Gysin (preserve word breaks)
This is the same as the other Burroughs-Gysin setting, but it preserves the word breaks in the original text, which differs from the technique as Burroughs describes it.