When the pattern says mark with waste yarn its telling you to tie some yarn on either end of those stitches to let yourself know when you've gotten there. I've got some split-ring markers
I use for things like this, but any contrasting yarn would do the trick.
The pattern is telling you to work with two skeins at the same time, one on either side of the neck. It really is one of those things that makes much more sense when you get it in front of you. It's a little tough to visualize, but give it a shot!
Hope that helps!