How to use BackTrack
When you open a link in a new tab, the new tab will continue your Back/Forwards history rather than starting from empty. For example: start by looking at the BBC News page, then middle click on a couple of interesting headlines to open those stories in new tabs. Now, switch to one of those new tabs and right-click on the Back button.
Notice how you can see all the pages in the history of your original tab.
Go back to other tab (↶)
If you enable the "Go back to other tab (↶)" option then those pages are marked with a ↶ symbol because they are history entries that belong to a different tab. Say you've finished reading the article and want to go back to the main news page. If you click that entry (or just click the Back button, as it's the first entry in the history), the article tab will be closed and the main news page tab will be shown.
Now close the tab with the news page. In one of the other tabs showing an article you opened earlier, right-click the Back button again. This time, there are no ↶ symbols because the tab they came from (the news page tab) has been closed. They now behave just like any other history entry.
BackTrack only counts a new tab as being a continuation of your browsing if it was opened from a link. If you open a new tab using the "New Tab" command, or from a bookmark, or from outside Firefox, then a new history will be started as usual.
Branching History
BackTrack shows not only your current Back/Forwards history for a tab, but the full branching history including all other tabs and previous paths taken. For example, again starting by looking at the BBC News page and clicking on an article to read it. Then click Back to return to the main news page, and click on a second article. If you now click on the Back button, you can see that there is a ▸ symbol to the right of the entry for the main news page.
Using this, you can expand the first branch that you took, which is displayed as another history list next to the current one. This also works with new tabs - if you go back and open a third article in a new tab, you will have three branches available - just keep following the ▸ marks to display them.
If you click on an entry in one of the other branches, then the tab adopts that branch as the current history list (so you can easily move forwards or backwards through it).
Options
By default, BackTrack will only work for links opened in new tabs, not in new windows. If you open a link in a new window, it will start a new history as usual. If you would prefer new windows to keep the history in the same way as new tabs do, then go to the Add-ons Manager, find the "BackTrack Tab History" extension and click Options.
It is also possible to enable or disable the way history entries track which tab they came from. If you leave the "Go back to other tab (↶)" option unchecked then navigating back through the history for a tab will never switch tabs and will always show the page in the current tab.
The Branching History can be disabled entirely, or there is an option to control how branches are displayed in the menu. By default, the "Normal" setting, the branches are laid out horizontally. For each additional path taken from a page, another history list is added to the right, accessible through the ▸ symbol.
If there are lots of branches (for example, if you've opened a lot of links from a single page) then this can become more difficult to navigate through. Using the "Branch-centric" setting, the branches are laid out vertically. Each path from a page is listed immediately from the sub-menu, but only the first history entry is shown. Pages further forwards on that path are accessible through the ▸ symbol.
The "Smart" setting provides the best of both worlds. When there are lots of branches, it uses the "Branch-centric" setting. When there's a lot of history, it uses the "Normal" setting. The disadvantage here is that it can be confusing to tell at a glance whether a menu is showing branches or history.