I have mine mounted vertically, with the flat side facing the front of the robot. Its stuck to the back of my electronics box slightly behind the turning axis of the robot. As above, when you move the robot, the wheel should turn to compensate (IE: if you moved the robot round to the right, the right hand wheel would move forward to try and keep it going straight. You can adjust how sensitive it is with the little adjustable dial on the back marked 'Gain'. I would suggest putting to the point where the green and red light start to flicker between the 2, that about mid point.

If you over-do the sensitivity, you robot may suffer from what I called 'the shakes' - the robot corrects itself a little too much, compensates again and keeps shaking side to side until it gets a command or bumps into something to stop it.