I remember installing this. You install it like any volume (or tone pot) really, the only difference is you have two extra wires.

One goes from the button to the ground, and the other connects from the button to the signal out.

The button can either be those two circles in the plastic, but there are also 4 little pieces of metal sticking out of the bottom that you can solder them to.

It works by basically when you press the button it connects the extra ground wire with the extra signal out wire so that it grounds the signal out, thus killing the sound of your guitar.