Ozxplorer posted before I hit reply, and I'm sure he understands it better than I.
Basically, for Manual mode, the dial shows you what f-stop to use for how far away the subject is. This should give you good coverage from the flash. So, for something 5 meters away, f 4 should give you adequate illumination, and from your picture, f 11 would be good for a subject 2 meters away.
The red line shows what should work if you switch it to Auto mode. In this case auto mode will automatically adjust the flash intensity for a subject anywhere between 0.5 and 5 meters away. The photocell on the front of the flash (likely inside that hole surrounded by the green oval) will detect light bouncing off the subject to determine how much light it will give.
Make sure you set the camera's shutter speed to it's flash sync speed (likely the only speed on the shutter dial with a different color).
The basic principle for these types of strobes is fairly common, so you can get a general idea from most manuals. I don't see your model on butkus.org, but here is a general listing of manuals available there:
http://www.butkus.org/chinon/flashes_meters/sunpak_flash/sunpak_flash_units.htm
Some have sliding selectors instead of dials, some have 2 auto modes, but they all function similarly. The gx24 and 311 from the butkus link should give you a good idea.