Raising the Stakes

Before making a roll, you can choose to raise the stakes, which basically means that you commit to using some of your successes for a specific outcome before making the roll. The "called shot" in combat is a common gaming situation where raising the stakes applies, so we'll use it as one of the examples here.
When you raise the stakes, you add a certain number of dice (your wager) to the Challenge Pool. These counter successes normally, but you get a bonus success for every unsuccessful Challenge Die that falls within a particular range depending on the Risk of the roll).

1. Player declares intent.
2. GM determines success cost and, if applicable, restrictions on how successes must be spent.
3. Player makes Wager. The total number of dice in the player pool and challenge pool must exceed the success cost of the roll.
4. Player chooses Risk. If necessary, GM determines consequences of failure.
5. Roll dice and resolve action.

Intent

You can think of the declaration of intent as an exercise in counting your chickens before they hatch. You're basically committing to spending the successes generated by the roll in a particular way.
Example 1: "I want to shoot Thraxxus the Unfathomable in the head."
Example 2: "As I jump from the battlement, I activate my Golden Griffon and do a double somersault before I land on its back and fly away."

Success Cost

Once you've declared your intent, the GM decides how many successes you'll need to get the desired result. For multi-part actions, the GM may also place stipulations on how the successes must be spent. For example, they may decide that the successes must be spent in a particular order or that certain elements of the action can only take place after the character has spent the successes necessary to complete some other part of the task. If you don't like the cost the GM sets, you can modify your actions, lower the cost by accepting additional consequences for failure, other otherwise renegotiating the details with the GM.
Example 1: In this case, determining the success cost for the action is easy: The GM simply flips over to the combat section and looks up the minimum number of successes required for a dramatic injury to the head.
Example 2: This one isn't spelled out elsewhere in the game rules, but determining the cost is still simple. Jumping from the battlements doesn't require any successes--it's not dying afterwards that takes effort. The GM has previously ruled that you can activate your Golden Griffon (a small statue that turns into a live griffon when you toss it into the air and say the magic words) as a side action by spending 1 success. The leap from the battlements to the griffon's back requires an additional success, and double somersault is 2 embellishments, so the total success cost is 4. Obviously, you can't stick the landing unless you activate the griffon first.

The Wager

The wager is the number of dice that you choose to add to the challenge pool. You can wager as many dice as you'd like as long as the total success cost for the action is lower than the total number of dice in both pools combined. You must wager at least one die to get the benefits of raising the stakes.
Examples: In both examples, you can potentially pay the success cost using only the dice in your player pool and the challenge pool, so you can wager however many dice you'd like. Each die added to the challenge pool increases the number of successes that could get cancelled, but it also increases the number of dice that could turn into successes for you.

Risk

The risk category for the roll determines what challenge die results add to your successes as well as how unsuccessful rolls are resolved. There are three risk levels that you can choose from: Low Risk, All or Nothing, and High Risk. Before choosing a risk level, you should discuss the potential consequences of a failed roll with the GM. If a particular risk level doesn't make sense in the context of the scene and the action, it's removed from the list of options.

Low Risk

In this scenario, failure to reach the success threshold required to attain the desired result costs you a number or successes equal to your wager, but you can spend any remaining succusses normally to either partially succeed at the original plan or to take a different course of action. If the character ends up with fewer than zero successes, the action fails. For Low Risk actions, the player gets a Success for each Challenge Die that rolls a 1.
Example 1: If you don't get enough successes to put a bullet into Thraxxus's skull, you can still use any success you earn (after subtracting a number of successes equal to your wager) to hit some other part of his body or cause other standard combat effects.
Example 2: If you get fewer than 4 successes, you lose a number of success equal to your wager. If you still have 2 successes left, you can summon the griffon and leap to its back without the unnecessary acrobatics. With one success, you can either activate the griffon but remain on the battlements or take some other action that the GM agrees is a reasonable back-up plan when you realize the jump isn't going to work. If the roll fails, you throw your griffon off the roof without properly activating it, but don't follow it to the ground.

All or Nothing

This is exactly what it sounds like: you either get the intended result or you fail completely. If you roll fewer successes than needed to succeed completely, the roll fails. For All or Nothing actions, the player gets a success for each Challenge Die that rolls a 1 or 2.
Example 1: If you don't get enough successes to hit Thraxxus in the head, you miss him completely. Any success you rolled are null and void. Example 2: Since there are really only two options for a failed roll here (player stays on the roof or player plummets to earth) and they're covered by Low Risk and High Risk, the GM rules that All or Nothing isn't an option for this roll.

High Risk

High Risk rolls work just like All or Nothing rolls, but the character agrees to some specific negative consequence (beyond the usual ones) for failure. Wherever possible, the consequence should be a direct effect of the failure (for example, a character who fails at a flying kick ends up prone on the floor). If this isn't an option, any consequence that the GM agrees is sufficiently inconvenient for the character will work. For High Risk actions, the player gets a success for each Challenge Die that rolls a 1, 2, or 3.
Example 1: If you were attacking Thraxxus with a punch or a sword, the GM could give him a free attack if you failed, but the cause and effect result isn't as obvious with gunfire. Therefore, the GM decides to turn things around and make the consequence the root of the failure. If you fail the roll, your gun misfires and explodes, causing damage equal to the number of successful Challenge Dice.
Example 2: As previously mentioned, failure in this case results in the character meeting earth below at 9.8 meters per second squared.

Resolve Action

Since most of the details of the roll were determined prior to the roll being made, resolution is simply a matter of applying the results. If you got more successes than you needed, you can spend the ones that are left over normally.