1) Level Up: Spend your souls at a bonfire to increase you stats. Everytime you increase a stat, you gain a Soul Level (SL) which would be your overall level. Everytime you spend a point in a stat, the souls needed to put another point is increased, and it increases globally, on all your skills. You'll figure it out after a bit.
2) Buy shit!: Souls also work as currency, since in the world of the undead, life is the only thing you would want. Souls and Humanity. But you can't sell humanity, they are bound to you. But souls works as gold - A merchant can sell you a weapon for 500 souls for an example
3) Upgrade stuff!: Upgrading your gear is insanely important. And to upgrade your gear you need shards (Titanite or blue or red etc.) depending on the weapon, and souls. Only smiths found around the world will upgrade your stuff You can usually buy shards off them, for souls.
I wonder if the UPS guy thinks lowly of me because I always have pajama pants on when I answer the door?
I just like wearing them at all times when I'm home.