apply only to the backside - where the metal backing or the pad makes contact with the caliper on the caliper side and where it makes contact on the caliper housing on the other side. do not put it on the pad surface.
you would only use this on the front if you have drum brakes in the back, if you have discs in the back, apply them there too.
I only use it when it's included with a set of pads(so just about never). I don't make it a point to buy some when I'm doing brakes. I might get some for my Toyota next time; it's the only vehicle I have with brakes that whine faintly when coming to a stop.