N00b question.

How exactly does one use router quality of service settings?

I've read up on it a bit but I'm still not exactly sure how to use it. So, my real questions are these:

Generally, how does QoS work? How would one use it, say, to guarantee smooth performance in latency sensitive application (cough online gaming cough)? Performance for that sort of stuff bombs out on our connection when somebody is uploading files.

I apologize if this is kind of sprawling. Suggestions to clean it up / edits welcome.