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CHEAP multimeter... Great for measuring batteries.
There are much better multimeters out there... but this one anybody can afford and will do a decent job of measuring voltages and resistances.

Picking a setting involves understanding what you are measuring. The setting is chosen as the smallest range that the level you are trying to measure fits into.

Example: Measuring the voltage on a 9v battery = DCV 20
Example: Measuring an unknown resistor(Could use the color charts to find value)
- Start with 2000k, find the order of magnitude(how many 0's in front) then switch to the proper setting: 2000k measure 002, switch to 20k and measures 2.15k 

Measuring current involves breaking the power loop and inserting a near short in the line for measurement. 
Don't try to measure current unless you know what you are doing, otherwise you might short out something important.

Every setting has a usefulness in some end field. 
Hobby circuits are going to typically use
DCV: 2000m, 20 
Resistance ALL
DCA: 20m 200m
ACV: 200 (US) 750(Europe)

Multimeter Settings:

Top Left DCV: 

DC voltages = Batteries and what most end circuits use other than AC motors/heaters .

200m = 200mV (tiny voltages)
2000m = 2V (single cell batteries, AA,AAA,C,D = 1.5v)
20 = 20V (9v batteries, 12v batteries)
200 = 200V
1000 = 1000V

Bottom Left Resistors

2000k = 2,000,000 ohms = 2,000kOhms = 2.0 MegaOhm 
Typical for really low power stuff or really sensitive current conversion where noise isn't too much of a concern. 
200k = 200,000 ohms = 200kOhms
Generally the same as 2000k
20k = 20,000 ohms = 20kOhms
Typical for "pull up" circuits and noise sensitive
2000 = 2,000 ohms = 2kOhms Typical for power circuits
200 = 200 ohms = 0.2kOhms Typical for power circuits

Right DCA = DC Amperes = DC Current

200u = 200uA = Current through a 7.5kohm resistor from a 1.5v battery (V=IR)
2000u = 2mA = 0.002A = Current through a 750ohm resistor from a 1.5v battery
20m = 20mA = 0.02A = Current through a 75ohm resistor froma  1.5v battery
200m = 200mA = 0.2A = Current through a 7.5ohm resistor from a 1.5v battery

ACV = Alternating Current Voltage 

Voltage from a Wall Socket (Don't try and if you do BE EXTREMELY CAREFUL NOT TO SHORT THE PRONGS TOGETHER)
US = 120vrms (170volts peak-peak) 
Europe = 240vrms