To test the serial mode you don't need any jumpers - just use the board as if it were a totally normal Uno.
Running test_serial.bat will connect avrdude to the 328P's bootloader and report the Optiboot version number (amongst other things).
To try the ISP mode, connect the 8U2 to the 328p ISP header as follows:
- MISO-16U2 to MISO-328p
- SCK-16U2 to SCK-328p
- MOSI-16U2 to MOSI-328p
- PB7-16U2 to RST-328p
- PB6-16U2 to PB4-16U2
Check the drawings in the docs folder of the zip file for the relevant pin locations.
In this mode the 16U2 chip will behave just like an ArduinoISP. Running test_isp.bat will connect avrdude to the 16U2's ISP code and report the arduino-usbisp version number (of which the minor version number is really the number of bytes of free memory).
With the jumpers in place you may update the 328p's bootloader with the IDE: Select "Board -> Uno", "Programmer -> Arduino as ISP", followed by "Burn bootloader".