The Subnet operator is essentially a way of creating a macro to represent a collection of ops as a single op in the Network Editor. The Subnet op can contain an entire op Network within it, stream-lining and simplifying your op network both visually and conceptually.
Selecting Dive into Network from the RMB menu lets you dive inside the node where you will see four Sub-Network Inputs. These four inputs are connected directly to the four inputs on the original Subnetwork node. Proceed by attaching ops as required to these four subnetwork inputs. The display op will be wired back to the output connector of the Subnet op in your original network. To get back to the original op network, go up a level by typing U.
Please refer to subnetworks for a complete discussion and an example of how to use subnetworks.
You can select several nodes that you want to make into a subnetwork, right-click them, and select Actions ▸ Collapse to Subnet to automatically create a subnetwork out of them. You will see the selected Operators replaced by a single Subnetwork node, and it will be properly rewired to contain the previously selected ops.