Create and award badges to your users manually, or based on what they accomplish.
Install the plugin via the browser based installer or by uploading the folder to your plugins directory via FTP.
Once installed, you will be able to edit the badges under Tools > Badges. When created (and after visiting and re-saving your permalinks under Settings > Permalinks) you can view a rundown of your badges at yoursite.com/badges. It's up to you to style and format the display of the badges the way you want them -- expect more instruction and examples on this specific area after public release.
Badges, once awarded, will display on author archive pages (that's the URL typically linked up when you click an author's name in their post byline).