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The plugin works out of the box, just like oEmbed, but not really using Twitter's oEmbed. It creates blockquote elements out of your links to tweets with the cite element containing the tweet author. Just paste a URL to a tweet on a separate line in your editor. Like this:

• http://twitter.com/#!/themefm/status/101217888383410176

Tweets are cached for better performance. The plugin itself has got a custom CSS field where you can style your twitter blockquotes however you like. Use the blockquote.tweet CSS selector and add an image with some padding on the left, or perhaps style the tweet author differently. Hardcore theme and plugin developers can take advantage of the many filters inside the plugin to make Twitter Blockquotes do whatever they like -- add the author avatars, time and date, action intents and more. Code is well commented and easy to understand.

Read these articles for more control over the plugin:

• Embedding Tweets in WordPress with Twitter Blockquotes
• How to: Display Avatars with Twitter Blockquotes for WordPress