You must navigate to whereever you placed the folder containing VSS.  There you will find VSSMainButtons.py.  Double clicking it will automatically convert the Python Scripts Palette to the VSS mode. 

For step 2, load any set of Kids4 skin textures; the default will do just fine. 

When applying the VSS skin template to any character, just apply to the nude model first before adding any clothing.  The reason, VSS skin template contains a set of rules which are designed to match specifically named material zones on the model.  However, those rules contain default asterisks * for easier recognition and substitution.  But if those particular zones also exist in clothing, VSS will apply shaders to those.