Do I just use it for all the answers that I like?
Generally you "select" the single answer that was most helpful to you.
Can I use it more than once on every question?
Nope. You can change it, but you can only select one at a time. (Choose "de-select this answer" and then you can select another one.)
Do the people who answer the questions know when I've 'selected' their answer?
They can figure it out but I don't think they get an automatic notification. (They see a ribbon appended to their post, if they look back at their post, and also the information about how many questions they've answered is on their profile.) (Also, under your original post it will say "view best answer, chosen by GracieGirl.")
Do I have to select answers?