It needs power and ground all of the time from the battery. (the big red and black ones) Then it needs a switched ignition wire to tell it to turn on. (the little red one) Then you have to remove the internals from the distributor, and hook up the magnetic trigger wires as stated in the instructions when you find them. I believe they are purple and green(assuming you have an HEI?). Anyway, it's easy.
Also, if you experience engine run-on when you shut the key off, you may have to install the diode in the brown wire coming from the alternator. (make sure it is facing the right direction) If it didn't come with one you can get a 100V diode at RadioShack for like $1 or something.