With TARS on, you will have to set your in-game radio frequencies appropriately to hear the same people on that frequency. At the moment, when you PTT, everyone hears everyone else so it can be confusing for larger flights. With TARS on, it will be like in the real world -- if you don't have the right frequency dialed in, you can't speak to them and they can't hear you if you are in the game. If you are on the lobby or just listening in, you will hear everyone but nobody can hear you.
As for the bindings, you press the appropriate binding so that when you press your PTT, you will be transmitting on that frequency/mode (UHF, VHF FM, VHF AM).