The KWL chart is used mostly to demonstrate progress throughout a unit. In the very beginning of a unit, you would ask students what their prior knowledge is on the subject you will be studying. Everything they already know about it would be written into the section marked K, for Know.
The W section refers to either what the student wants to know, or is wondering. This section can also be filled in during the beginning of a unit, or in case your students have little to no prior knowledge on the subject, it can be done after introducing them briefly to the subject at hand. This is where the students will tell you what they are interested in learning about regarding the subject and what they would most like to know. These questions are important as sometimes we as teachers forget that student questions are also great learning opportunities.
The L section of the chart is filled out at the end of the unit so that you can see what students have learned. This should contain only newly learned information and not what students already know. Use this information to check and see what student questions were answered during the course of the unit and take the time to see what can also be answered now.
A basic chart on fish habitats could state that the children Know fish live in water, they Want to know if they can live in any kind of water, and the L could be that they Learned that fish can live in fresh or salt water, and not tap water.
These charts are sometimes extended to become KWHL charts. The H stands for how and refers to how the students will find out what they need to know when being used with older, more independent learners.
See example at http://www.brighthub.comhttp://images.brighthub.com/media/02E91D_kwl.doc.