How do I use it?

Just click "Set custom time" from the Compose view. Any email you send to the past appears in the proper chronological order in your recipient's inbox. You can opt for it to show up read or unread by selecting the appropriate option.
Is there a limit to how far back I can send email?

Yes. You'll only be able to send email back until April 1, 2004, the day we launched Gmail. If we were to let you send an email from Gmail before Gmail existed, well, that would be like hanging out with your parents before you were born -- crazy talk.
How does it work?

Gmail utilizes an e-flux capacitor to resolve issues of causality (see Grandfather Paradox).
How come I only get ten?

Our researchers have concluded that allowing each person more than ten pre-dated emails per year would cause people to lose faith in the accuracy of time, thus rendering the feature useless.

Their findings:
N = Total emails sent
P = Probability that user believes the time stamp
φ = The Golden Ratio
L = Average life expectancy