UPDATE: I have 24 letters now, all except Q and X, so I'll reveal my method. I went on ebay and bought a monogrammer set that had some of the letters I needed. Then I resold it with any cams I had that were duplicates. Rinse and repeat until I had all the letters I needed. Worked!
You insert the plastic letter template (flat piece sticking out on the left) and crank it in, then you use the plastic letter guide to show you where to begin stitching.
This is a fantastic attachment that makes spectacular monograms. How nice is this? (And how cute is this vintage fabric?)
I'm using it as a tab on a wallet I'm making for a friend.