Step 1: The Karate Chop
Step 2: The Bird... Trap
Step 3: Air Hole
But leaving the bird analogy, the red part of the picture should be the only part of your whistle that has a hole in it.
Step 4: How to Use It!
Put your lips on the knuckles of your thumbs, DO NOT "make out" with the hole between your thumbs. This doesn't work. Blow down into the hole. Notice how the hole is still exposed when it's up to my mouth. That's okay, it's not a trumpet.
You should have make a single note. To change the pitch, move the fingers on your left hand away from the whistle. This makes it higher. To make that crazy Western Movie Showdown sound, blow while moving your left fingers in and out! With practice, it's very easy!