This is where you describe yourself, the photographs as a whole, or whatever you like. You use the 'title' attributes of each of the images to set the captions. Try to make all the images 600px. All images will be resized to this width to be displayed (bigger and smaller), so it makes sense to use images of that width.
It is extremely easy to add images to this template. The images are formatted using an unordered list (using Galleria ), so go into the source and find the ul / li tags with the images. To create new ones, simple copy and paste one of the <li> lines, and select your new image, and set the caption using the 'title' attribute.
If you're editing this template in Dreamweaver or some other WYSIWYG editor, don't let the 'Design' view scare you. Since everything is formatted using Javascript, and Dreamweaver doesn't dynamically process this, it may look a little weird in the design view, but rest assured, it works just fine.