The diplexer allows you to combine your local antenna or cable company signal with your satellite signal onto one cable, this will eliminate the need to run two wires to the receiver. Since there are two signals on the cable (one from the satellite and one from the antenna/cable), you will need a second diplexer to separate the signals out to your satellite receiver (one input for your Antenna and one for your Satellite).
The first diplexer goes outside by your rooftop local antenna and satellite dish. Plug the rooftop and satellite antenna into the diplexer with two coaxial cable jumpers. The diplexer looks like a typical splitter, and when reversed it will combine the two coaxial cables into one. Run that coaxial cable into the house. Once behind the receiver use another diplexer to separate the local and satellite signals again. Now you have effectively brought your local and satellite signals from outside into your home running one cable. Please note that there will be some signal loss whenever using diplexers, usually not noticeable.