I've never tried to smoke one of these but I understand the procedure is to split the pipe and pack the front part, just like a regular pipe. With a finely cut tobacco for best results. Rejoin the pipe. The pipe has a small hole in the metal cap at the front. A lighter or match is held in front of this and the flame drawn into the pipe. Once it is lit turn it over in your mouth and light again to get an even burn.
These pipes came onto the market around the 1920s and there are many interesting shapes and variations, some made from bakelite. If I didn't have so many pipes to collect I'd collect some for decorative purposes. Here's some more pictures:
http://pipes.over-blog.com/article-2754718.html