To use Custom VGA in a typical scenario, you would turn Custom VGA on in the settings window. Then turn on VGA Sideways. What this will do is rotate the image as it is sent to an external monitor. Next, choose a file to display. While a file is displayed, simply plug the VGA cable into the iPhone. An alert will appear asking for the resolution you want (typically choose the highest resolution). After that the image will appear on the monitor.
Using Custom VGA does slow down the application a little and the image is slightly delayed to the screen, but it is great for projecting your charts or lyrics to a larger monitor.