If you set the ceiling to -5 dB, for example, then any input signal louder than -5 dB gets squashed down to -5dB. In this situation, signals quieter than -5 dB won't be affected. It functions kind of like a compressor in that way, except it never lets anything get louder than the ceiling (one exception to this statement is for some types of older limiters, which aren't so strong that they never let signals over the ceiling). Fortunately, as a limiter's job is (in theory) pretty simple, using one is actually not too tricky of a process.
As far as their function, limiters are really useful for signals with occasional huge spikes in volume - say a slap bass line. For tracks like this, a compressor might not be forceful enough to get control of the volume spikes. This sort of situation is what a limiter lives for.
Something important to keep mind mind is that some limiters might not be able to set to the ceiling level that you want, say if you want to set the ceiling quite low, for situations like these one can simply amp up the gain before a limiter and then put it back down afterwards.
Alright, that's really all there is to it, good limiting everyone!