this pattern is available at http://www.elann.com/ShowFreePattern.asp?Id=106024
My question is do I work the increases on all the rows or just the wrong side rows? I thought I was only supposed to do the increases on the wrong side rows, but then the following bit confused me. The pattern reads, “When you get to a point where you do not have enough sts left for one more repeat of the stitch pattern, place another marker. All the sts between here and the increase marker are in queue, to be knitted plain, except for the last one, which will be an increase (K-f&b into that st). Now count how many sts between the queue marker and the increase marker. Begin knitting after the increase marker with a K-f&b, then knit plain until you have that same amount of sts as were in queue before the increase marker. Place a marker. Begin knitting in lace pattern again.” How does this work?

You actually make the increases on the RS (odd numbered) rows.
"Work all odd-numbered rows as inc rows: K-f&b before & after each increase marker, total of 8 inc sts. "

Place a marker before and after the stitch pattern repeat. When you have enough between those markers and your raglan increases for another repeat of the st pattern, then place a marker and knit another pattern repeat. Thanks for reminding me of this pattern, I may use it this year.

Thank you for your quick response. I guess I thought that the odd numbered rows were the wrong side rows because on the Horseshoe Lace pattern it reads, "R1 & 3 (WS) . . ." and the lace is worked on the even rows, or the "right side" rows.
So I'm still very confused as to which side I work the increases into: the RS or the WS/the odd rows or the even rows/the lace rows or the plain rows. Correct me if I'm wrong, but I was under the impression that the RS/even rows/lace rows all coincide. And the WS/odd rows/plain rows were where I'm supposed to make the increases.

Since you're to kfb for them that's best done on the knit rows, and it's easier to inc on a knit row. Ignore the rs/ws notation for the pattern, and do the lace sts on the knit rows; the plain rows in between will be purled when knitting flat and knit in the round. The stitch pattern instructions were taken from a collection of stitches and the beginning rows were for knitting flat. After a couple rows you'll be able to keep it straight.