Hi Martyn,
Hard to explain in a short post how to use a lathe! But, there are plenty of books available which will explain things much better than I could. I've recommended this book before on other threads:
http://www.sherline.com/bookplug.htm
Here's a quote from that page:
"Naturally, Sherline tools are featured throughout in the examples, but the rules of machining apply to all types of equipment and sizes of projects. Information is given on selecting materials; using a lathe and a mill; measuring and measurement tools; cutting tools; joining metal (welding and soldering); using accessories for threading, indexing and gear cutting; setting up a home shop; contests and information resources for machinists and much more. Plans and instructions for several simple projects are provided for beginning machinists."
I cannot recommend it highly enough, its a fantastic resource, and my lathe is significantly larger than a Sherline (I've got a 10" South Bend with a 4' long bed). For example, my model engineering club ordered 50 at once (so we could get a discount) and they were all gone after 2 meetings. My father was a professional machinst for 40 years, and he refers to his copy occasionally.
Mike