The RTH works the same as for the original DragonOSD. The receiver should be programmed to activate the autopilot in failsafe mode. One of the channels of the receiver will be assigned this control task (as well as activating the in-flight menu). That control channel serves several purposes - activates menu, turns off all screen display, activates autopilot, or normal display mode - depending on the value of the channel. So you typically set the failsafe value for that channel so that it activates the autopilot. It does not directly detect loss of signal since different radios have different loss of signal conditions.
Because of this, you can either manually activate autopilot or have it activated via a failsafe condition. In my usage, I normally assign the autopilot to one position on a three-way switch on the radio. With that switch I can either activate menu, failsafe, or normal mode.
The DragonOSD has two assignable control channels. This means that you can select which two servo channels you want it to control. For example, you can have it control the rudder and the elevator, in which case you will have altitude control and steering. Or you can have it control two ailerons, in which case you don't have elevator control for altitude management. You could one channel to throttle as well but I have not implemented throttle management algorithm for now. So, basically, you can pick any two channels to be controlled.
Apart from this assignability, the autopilot operation would be identical to that of the original DragonOSD.
As for a video - take a look at Jettpilot's Zephyr thread - there's a video in there which shows the OSD in operation:-