It's simple and easy to use. You launch the app and a split-screen comes up. On the top you have a Google map (yeah, the irony) and on the bottom you have a blank slate. Right in the middle you have a green button. Drag the Google map around to your desired position, touch the green button to lock the map in place, then use your finger to draw a shape (circle, square, squiggly -- it doesn't matter) around any area of the map. Once your shape is connected at the ends your search results will immediately be listed on the bottom part of the split-screen.
Right now the app only searches restaurants in the US, but Yahoo! says they be launching additional local categories on an ongoing basis and eventually give the app international support. All in all, it's a very cool app and at the cost of free, why not give it a try? Yahoo! Sketch-a-Search is available in the App Store now and requires an iPhone or iPod touch running OS 3.0 or later.