1) Connect one end of the potentiometer to the supply voltage that is most positive and the other end of it to the ground or supply voltage that is most negative. Connect the center terminal to pin 6 of the 555 and turn the knob.
2) connect resistors and capacitors as described in the circuit example.
First sim shows what a 555 does naturally. The trip points for TRIG is 1/3Vcc and THRS is 2/3Vcc, respectively. In this example, I powered the 555 with 9V, so it is easy to see it trip at 3V and 6V.
The second sim shows how to make the 555 Schmitt Trig trip on a small ac signal. Compare the resistor values to the first sim. Note how the middle 10K was split into two 5Ks, and the two outside 10Ks were increased to 10.5K. By capacatively coupling the AC signal to the center tap, the voltages at TRIG and THRS swing through the trip points at the appropriate time.