A racking cane is a long rigid tube which is bent on one end and is used as an aid in racking from one fermenter to another. They usually have an attachment at the straight end which keeps the cane off of the bottom of the fermenter and helps minimize the amount of sediment you suck up during transfer.
Some people prefer to use only the plastic tubing for racking and don't use the cane. This is an individual preference. I use several cut to different lengths to fit the job (1 gal batches vs. 5 gal).
To start the siphon;
1.) Place the cane in the fermenter.
2.) Fill the hose with water, keeping both ends level.
3.) Attach one end of the hose to the cane.
4.) Lower the other end of the hose into the empty fermenter.
The siphon should start. If not, repeat the process. If a bubble should form where the tubing connects with the cane, pinching the tubing usually dislodges the bubble and sends it down the tubing.
Some people use mouth suction or other tools to start the siphon. I primarily use the method above, but also use the CarboyTtap produced by Fermentap on occasion, especially on my 1 gal batches where I don't want the dilution from the water in the siphon hose.