You put some soil in the bottom of the bag and "plant" your seed potatoes and once they grow to be 6 inches tall, you just add more soil to cover them! And continue doing this until the bag is full! When its time to harvest your potatoes, dump out or rip the bag and gather your potatoes!
For the full instructions with some great pictures, check out The (mis)Adventures of a "Born Again" Farm Girl.
Enjoy and let me know what you think!