The vibrating mechanism is mainly for pencil work on negs, and can also be useful for abrasive and etching work. By adjusting the vibration frequency, you can control how smoothly the pencil blends. If you touch the negative cradle, you'll notice that this is what is vibrating. Experiment, and you'll figure out what frequencies are right for different effects. Generally a higher frequency will result in a darker line.
You should also have one or two gooseneck magnifiers or a higher power binocular magnifier attached to the machine to see what you are doing.
It's a good idea to make a mask to hold the neg. This can be as simple as two sheets of paper with a hole in it the size of the hole in the neg cradle, so that the cradle doesn't contact the negative directly. You put the negative in the cradle, and then you can rotate it or move the neg around and rest your wrist on the hand rest as you work on the negative.
The pencil I find most useful is HB, but you should have a few different types from soft to hard. You can start with ordinary drawing pencils, but ultimately you'll want a lead holder and thick leads, sharpened to a fine point with a stone or sanding block.
Look for old retouching manuals, and you'll find a lot of useful information.