Sparging is when you wash your grains with hot water to get as many of the fermentable sugars as possible into the wort. With an all grain batch, you would want to use 150F (about 65C) water, but with a simple extract batch like this you don't have to be as thorough. Hot water from the tap should be fine, I have mine turned down to 130F (about 55C).
If you don't have a wort chiller available (as I didn't), it's a good idea just to do a partial boil. In a full boil, your wort will contain all the water you are later going to ferment, but without a chiller that would take way too long to cool down. Some of the oils from the hops would degrade and you would lose some of your aroma. When you're sparging the grains, keep the water turned low and limit how much water gets into the wort.
Place a colander at the top of the brewing pot and put the grain bag inside of it. Gently sparge the grains with hot water until they run clean.
Set aside the leftover grain, you can use it to make bread