First you roll the film out flat the night before and let it rest. Then cut the film slightly bigger than the window pane, peel the backing off, and mist the back side of the film with plain water. Then you apply the film to your clean window, using a credit card and a soft cloth to squeegee the bubbles and extra water out. At this stage you can still slide the film around a bit to get it just the way you want it. Finally, trim the edges with a sharp blade.
It's great for the bathroom. It obscures the view and provides privacy without sacrificing light.
Here's the view from the entry downstairs as we were nearing evening. I was worried when I bought this product, because it's rather pricy, and if it turned out to be hard to apply, I'd be out the money. I'm glad I tried it though!
Here are some sites with pretty designs in window film: