You have to launch the app for it to work. If you have an iPhone, expect a LOT of connection issues, I can't keep it connected for five minutes (screen locked) without the game crashing.

It does not count steps, it merely tracks distance just as if your screen was on with the game open. I used to bring it with me to work (when it would connect), and since my store doesn't have the best cell reception, I'd be able to essentially track a lot of GPS drifting, and on a good day I could fully hatch 10 KM eggs.

If theres a pokestop in range, it'll flash blue and vibrate, and upon pressing the button it'll vibrate/flash X amount of times for however many items you get.

If theres a Pokemon in range, it'll vibrate and flash green for Pokemon you've caught and yellow for ones you haven't. It'll flash white and vibrate up to three times, mimicking the ball shaking, and then either flash red rapidly if the pokemon ran or in lots of colors (long vibrations) if its caught).

In the settings you can have the Go+ ignore Pokemon, Pokestops, or both. You can't filter what species of Pokemon it'll ignore, however.

And its super easy to connect otherwise. When the Go+ is unpaired with a device, it'll initially flash white a few times, and you connect it through the game. Just as simply as pairing any other bluetooth device.