There is are some good threads on here re dry hopping. I don't do all grain yet, but that includes adding hops at different stages of boiling the wort to add flavours and bitterness. In a kit that has been done already. Hops or hop pellets are included in a kit usually to add certain volatile aromas by sprinkling the dry hops into the fermenter at a late stage.
Basically when fermentation is almost or fully completed you add hops into the fermenter.
So far I have only used hop pellets. Some kits advise you to steep the hops in water before adding, others to just sprinkle on the top (that being the case with this FNZP kit).
They add aroma and the perceived wisdom is that if you add them too early (as I did by adding after a specified number of days from pitching yeast, in accordance with the instructions) you will lose some of the volatile aromas through being driven out with escaping CO2, and you might even get "grassy flavours" developing. 3 or even just 2 days (from a few different articles/threads) seems to be the optimum period for adding hops before bottling (or racking into a bottling bucket leaving hops behind).
From my reading around the subject I prefer to wait until fermentation is complete, or within a couple of points of target gravity, rather than adding too early as happened when I did this kit.
In a subsequent brew I tried putting the hops in a bag and raising and lowering the bag a couple of times a day (using fishing line through the bung hole) but I found that the hop pellets expanded much more than I expected into a fairly solid mass and I got much less hop flavour than expected.
A simple but good piece of advice on here (from Terrym I think) was to sprinkle the hops on the surface and give sharp taps around the "waterline" of the fermenter a few times a day which makes the hop debris gradually drop down through the fermenter and settle on the bottom.
Most recently I racked into a bottling bucket (CO2 filled to limit aeration) through a filter bag (sanitized Sainsbury's vegetable bag) to remove hop debris and that worked well.
I'm sure others will do things slightly differently or have a more informed view but I hope that is a useful starter.