Okay
Bob basically nailed the cycles.
The numbers (before letters) on that dial represent a 'Delay Start' feature, so you can start the machine but it wont go until later in the day (Cheaper electricity?). You probably don't have to worry about this feature burning your house down, as some newer models might.
Depending on the letter you choose on the buttons side, you'll want to turn the dial to correspond to that letter before you latch the door. Say you select B:C, and want a normal cycle, turn the knob to B, then latch the door.
If you wanted a 'C' cycle, then turn the knob to the letter, latch the door.
If you have a long pipe run to the dishwasher, have stubborn stains, maybe hard water or an older Chlorine (not Enzyme) detergent, then use the "HOT" option, which will increase the main-wash (perhaps prewash and final rinse) temps. Don't use this if you have water above 120º from a short pipe run or you are using "Enzyme, Eco-Friendly" detergents, in fact, you'll want to use the 'C' wash for these.
Hope this is of use. Don't hesitate to pose any more questions about this machine!