You have it placed in your consumables along with a black eye stone (for invading worlds) after beating the phalanx blob in 1-1. You can use these items an unlimited number of times.

When running around the world you've probably seen signs reading "You can summon here'. This means, in soul form, you can use your blue eye stone to place your soul sign on the ground. Other players in your world, in body form, will be able to see your sign and can recruit you to aid them.

You get one life with the goal of helping the player defeat the zone. If successful you'll regain your body. If not, you'll still receive the souls gained in that world unless you were killed by an invading black phantom. Not a big concern as you WILL rack up levels playing as a blue phantom. In body form you'll be able to see these blue signs. There are not always messages to indicate the areas, but the beginning and end of nearly every zone work.

The best areas I've noticed for co-op play are 4-1 and 4-2...shrine of storms and adjudicator arch stone I think. But once again, any area your having trouble with, put your blue sign down, ideally in places you know other players are seeing as well. Your bloodstain will still be there when you return to your world. You'll learn a lot about the levels, get xp, and be involved in some epic black phantom battles.