ON and OFF is to simply turn cruise on or off. It sits in the ON position normally which basically means its turned on awaiting you to set it. You can slide it to OFF so it clicks and stays OFF if you prefer. (ie if you have it in the off position then all other cruise control buttons will do nothing).
However i just leave it in the ON position, as even when ON it does nothing until you press set or the resume button.
To use cruise, simply drive like normal till you get to the speed you want and press set. (as long as its ON). No need to hold it for 3 seconds, just press it and the current speed will be maintained without you needing to use the accelerator. It is not like the very old cruise which just set the accelerator, but it will maintain the speed adjusting the accelerator as needed to maintain the speed. (no the peddle doesnt move)
If you use the brake or clutch at all it automatically and immediately 'deactivates' and will only resume cruising at the previously set speed if you slide to RESUME.
(if you are currently travelling slower than the previously set speed when you press resume it will aaccelerate up to that speed on its own)
You can also deactivate cruise by sliding the switch to off.
If you turn off the ignition, then any saved speed to which you can RESUME is lost.
When you are currently cruising and maintaining a speed you can make small increases or descreases in speed by pressing the set button to slow down or the resume button to speed up. Roughly by 1mph incriments. (think i have that right small chance its other way around).
I think cruise is great if you drive alot on motorways - especially if they have roadworks, it makes maintaining the speed limit stress free, - no more looking at the speedo every few seconds then realising you have ben 2 mph over the limit and then trying to guess how slow you need to go to offset this!
Also, when cruising, you can use the accelerator to speed up if say you wanted to pass someone for example, when you release the accelerator it will simply slow down to the previously set speed and maintain that speed again. Unless as above you use the brake, clutch or slide the switch to OFF.
I also believe it deactivates if traction control or ESP was activated if you have this, but then if these activate when crusing you have more important things to worry about!