How do you use the displacement feature?

I’ve been looking around for a decent tutorial or something to explain to me how, ive found plenty of test animations on youtube but nothing yet to tell me how to use it on the mesh correctly. Any help would be appreciated.

texture or modifier?

If you are looking for a tutorial on how to bake a displacement map, here is a video tutorial I made.

If you are trying to get the mesh to be displaced there are two ways, the displacement modifier or a displacement texture. In order to create a displacement texture you just have to load the image into a texture slot, map it to the UVs, and then in the ¨map to¨ menu click on the button that says ¨Disp¨. If you click once, the displacement will be positive, if you click it twice, it will be negative. There is a slider that controls the amount of displacement.
The disadvantage of using a displacement via texture is that you don´t have direct control over the result, as there is no preview in the viewport.

The other approach is by using the displacement modifier. Load the image in a texture slot, and make that slot inactive. Add the displacement modifier and within the modifier select the texture, the Uvs, and the ¨Normal¨ option. Adjust the amount of displacement and that´s it.

For boths approaches, you should add a subsurf modifier to the object in order to have the necessary resolution on the geometry to be displaced. This modifier should go before the displace modifier.