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In it's very basic use: Think of the 2 battery switch as a device to choose which battery (or both in "All" setting) to charge from your engine's alternator. This will also make the connection to the selected battery for re-starting the engine.
The red leads (positive) of the batteries are placed on the outside legs of the switch and the alternator + in the center of the switch (The part that rotates). All battery selector switches you buy should come with their specific diagram but this is the basic idea. The negative leads are all connected together on a bus. Make sure you use appropriately sized battery cables depending upon the distance from battery and the calculated voltage drop. Best practice is to keep the batteries and switch close together. Hope that helps a bit? Will