The purpose is to provide constant moisture to the hair in the baggie. The hair out of the baggie (canopy) and scalp don't have to be moisturized as frequently. A lite scalp oil will provide moisture for that hair for days.
1. Simply put your hair in a ponytail. You can choose to then braid the ponytail or leave it loose.
2. Fill a sandwich baggie with 1/4-1/2 (or some fraction in between) of your favorite moisturizer (creme or oil). Oil will absorb in to the hair quicker. If cremes sit on top of your hair, go for the oil. Some good choices are EVOO (extra virgin olive oil), OO (olive oil), avacado, sweet almond, jojoba, meadowfoam, grapeseed, monoi, etc.
3. Very carefully, lower your ponytail into the baggie and secure it at the top with an elastic band.
The length for which you keep your hair in the baggie depends on you. I left mine on for a week at a time. Some people only leave theirs on for a day.