It could be used in two ways, either completely sealed with chemical media or set inside/above sump, tee off a line to it and allow it to gravity feed back down. Depends on what you want it for, but otherwise it is not necessarily needed.
edit: I would not use any of the biomedia or filter floss that comes with it.
Live rock will be the bulk of your biological filtration so do purchase more. The skimmer will be your mechanical filtration, and carbon or purigen or whatever will be your chemical filtration.
Buy 75% base rock and only 25% LR. The base will become live over the course of a month (hosting bacteria) and be indistinguishable from the LR in 6 months to a year.
You want 1½ - 2 pounds of LR per gallon of tank capacity.