To sharpen, press the bevel flat to the stone and work the entire edge. In the beginning, I don't think it matters what type of motion you use, as long as you keep the bevel flat. Work it until you can feel a slight burr when you run your finger tip off the edge on the other side. You want this all along the edge. When you have established a burr along the entire length of the edge, turn the knife over and repeat on the other side. When you can feel the burr all along the first side, you've established the edge. Now you want to remove the burr. Stroke the blade lightly over the stone as if you were taking slices off the surface. At this point you want to move in one direction only, edge first, as if you were cutting the stone. Keep the bevel flat. Switch from side to side, moving the burr back and forth, until it's honed away. Moving the blade diagonally gives the effect of a slightly finer stone. Finish on a strop. If your blade is very dull, or badly nicked, you might want to start with a medium, or even coarse, stone to remove the nicks. Then move to the fine stone. Depending on your use, you may want to repeat with successively finer grades of stones or diamond plates. For the best possible results you can go down to a mirror finish, but this is overkill for most purposes.
This applies to knives used for woodcarving or other work requiring the finest possible edge. For general use many folks like to strengthen the edge with a micro bevel. Just lift the blade very slightly on your finest stone, and take a few light strokes to establish a small secondary bevel. A better way to do this is to use a super fine abrasive paper (7 or 15 micron, or about 1200 grit) on a semi-soft surface like a magazine or newspaper. This is really just an aggressive strop, and blends the micro bevel smoothly into the primary bevel. You can also use a razor strop