How to operate generator transfer switch?
Each switch has 3 positions, as labeled on the right hand side of the panel: GEN OFF and LINE.
In their current position, the normal electrical feed is going to each circuit. 
If you move the switch to 'GEN' it will then take power from the generator. OFF lets you kill the circuit entirely (connects to neither line nor generator).

If the panel was properly installed there should be no need to kill the breaker at the main panel: Flipping the switch on this panel disconnects the given circuit from the main panel.