Recently I wrote an in depth article on circular polarizers, where and how they come in handy.
To use a polarizer, screw the filter onto the front of your lens (using the right filter size, of course!). Once it is on, the front part of the filter opposite the threads will still be able to rotate freely. This is what you use to adjust the effect of the polarizer on your image. The best way to judge where the filter should be rotated to is to eyeball it. Look through the viewfinder and slowly spin the filter until you see a change in your image. Pay careful attention to things with reflections. Do those shiny leaves suddenly look greener? Do wet rocks suddenly lose their sheen? Does the sky get bluer? Once you see that effect, now rotate back the other way to see when the effect goes away. With a few twists, you’ll be able to judge which filter position shows the effect is fully applied. Now, check where your filter’s mark is. From there, rotate the filter in ¼ turns (90º) to fully apply or remove the effect of the filter. It’s a myth that the mark should always be at the top or side. It will depend on the angle of the subject being photographed and the light reflected from it, in relation to the position of your lens. If you really want to, you could calculate this by determining “Brewster’s Angle” through a whole bucket load of equations which you can read up on here. (Once you’ve done so, be sure to explain it in-depth at every social gathering, this is sure to make you the life of every party!) Or you can just eyeball it (better choice!)
A final couple of notes: Sometimes, grit or dust can bind up the filter, causing it to seize. Avoid this by cleaning the threads before mounting the filter to the lens. If it should seize, press the filter with the palm of your hand with quite a bit of pressure, then rotate your palm to unscrew the filter. If you grip a bound up filter to take it off, the pressure of squeezing it to turn it can increase the “stuckness” since the walls of filters are thin to keep weight down. Also be careful while you are rotating the filter to adjust the polarization that you are not actually unscrewing the filter. Most quality filters are glass, a sudden drop is not going to be good for it!