You cast on and work each panel separately, then sew them together and weave yarns through the 'holes' that are created in the cables. There's 2 stitch patterns that are worked over different parts of each strip, alternating on a row. For example, the Outside Panel has you work edge sts, then the first row of pattern 2 over 8 sts, then do pattern 1 over the rest of the row, and then edge sts. On the next row, you do Row 2 of both patterns as stated in the instructions.
That's more or less re-stating what the pattern says - what are you confused by? If you CO it will probably be a lot easier to see what goes where than trying to visualize it. You could also rewrite it and put each section of the row on separate lines, maybe that would help you.
sue- knitting heretic