How do I use the Hierarchical Select module?
Solution

It seems that the read me file for Drupal 7 needs updating. Things have changed from Drupal 6 to Drupal 7. You will find Hierarchical Select available as a widget for the term reference field. To use it, select it at for the field you want to use it for. Also you should use alpha releases at your own risk. They are expected to have bugs.

README

You should read the README file!

From the Drupal 7 version:


  Installation
  
  
  
  1) Place this module directory in your "modules" folder (this will usually be
   "sites/all/modules/"). Don't install your module in Drupal core's "modules"
  folder, since that will cause problems and is bad practice in general. If
  "sites/all/modules" doesn't exist yet, just create it.
  
  2) Enable the module.
  
  3) If you want to use it for one or more of your vocabularies, go to
  admin/content/taxonomy and click the "edit" link for a vocabulary. Now scroll
  down and you'll find a whole range of Hierarchical Select settings. All
  settings are explained there as well.