The edging is knit first and then the stitches are picked up along one side for the body, which is then done in short rows.
So, the initial cast-on is just 20 stitches. For the chart..... Row A and all odd rows are the right side of the "fabric" and you read them right to left. Row B and the even numbered rows are the wrong side and you read them left to right. I think this chart is set up a little differently then others I've done, but once I remembered which direction to read it wasn't too difficult. I was able to memorize it after a few repeats so I didn't really even read it after that.
At the end of all the even rows you will be slipping a stitch. This shows as a - on the chart. Right before the slipped stitch is a K2tog. To to the slip stitch correctly you need to do this (this was a little confusing for me at first)...
1. do the K2tog (this comes before the slip stitch)
2. bring your yarn to the front
3. slip the last stitch on your left needle purl wise
4. turn your work to start the next row
5. the first stitch on the next row is a ktbl, make sure you remember to go through the back loop!
This sets up a nice row of "loops" to pick up for the body of the shawl.
You will repeat rows 1-12 a total of 33 times. This creates 200 "loops" on one edge that will be picked up for the body of the shawl. As you go along you will begin to see the "loops." When you get ready to pick them up you will pick up the "back" or "outside" loop. It's the one that looks like it's on the outer most edge of the lace edging.
I hope this helps! Please let me know if you have any other questions.