Ok, here's how it works:
Press (N) to bring up the notes screen.
Moving around with the arrows sets the location where you want the note to be anchored, and you'll see the cursor moving around the screen. Notes show up as symbols on screen when you enter the note function, much the same way that zones show up when you enter the zone function, but you can set the symbol and color to your choosing.
In the notes screen, you see 3 'X's. One shows the note symbol, one shows the foreground color, and one shows the background color. On the symbol line, you see what the displayed symbol will look like. One of the 'X's is white, and the other two are grey. The white one is active and you can move it using the usual up/down keys. Pressing 'c' moves the selector from the symbols to the foreground color, then to the background color, then to the symbols. Notice the 'X's change from grey to white as you press 'c'. It's subtle.
When you have the symbol you want, press 'p' to place it. This changes the menus, disabling 'place' until you move to a new location (only one note per tile) and enabling 'text' and 'adopt selected'. If you move the cursor, you'll see your note symbol flashing on the tile where you placed it. The flashing indicates that it is the currently displayed note, and you can see how far away from it with the coordinates at the top of the notes screen. It always displays the closest note, even if its offscreen, but using the coords you can see where you need to move to get to the note tile itself.
Once you have placed a note, press 'n' to enter some text. You have 100 characters to work with. Type it up and press return.
If you don't like your note symbol, you can go through the symbol selector, pick a new symbol or new colors and press 's' to replace the old symbol with the new one.
If you want to delete the note, make sure it's the active one and press 'd'.
I *always* label levers, and sometimes also label bridges, floodgates, etc. to remind me which lever I need to pull to activate them. In a really complex fortress with dozens of levers, I always do both. You never know when you'll walk away from a fortress for a few weeks, come back and not know how to do anything. I tend to use symbols that represent what the lever controls, so a lever for a door will have a door symbol, a floodgate a floodgate symbol, etc. I color code my levers, so I know approximately what they do - red can injure dwarves, dk red controls magma, dk blue controls water at the source, lt blue at the function, etc. I usually use note colors to match the lever color, but the note colors aren't really that important if I have lever colors set. Sometimes I don't have access to the colored stone I need and then the note color becomes more important. Things like obsidian farms usually have a fair number of levers that operate in a certain sequence so the notes really help a lot.
Any questions?