The Machine is located in Lounge number 4 on the Skeena. As MileagePhoto pointed out, it only accepts cash or credit. Although the machine was once really difficult, it's not so bad now from what I've seen since the machine was upgraded about a year ago.
You still need to exchange the ticket it gives you for a boarding pass at the ticketbooth (if you're walking). If you're driving, you still have to disembark the ship with the rest of the cars and exit the terminal and make a U-turn at the Wain Rd Overpass and re-enter through the ticket booth to purchase the fare (at a discounted rate) for the rest of your passengers and vehicle. This ends up being the same price as what you'd pay to travel on Route 9 to Tsawwassen.
You can also purchase a throughfare from Tsawwassen to either Salt Spring or the Gulf Islands if you're going via Swartz Bay. This also ends up being the same rate you'd pay if you were traveling via Route 9 to the Gulf Islands from Tsawwassen. Although it would seem expensive at first, it's still cheaper than paying individual fares at each terminal.
The throughfare also doesn't guarantee the connection to the next vessel, nor does it earn you any extra boarding favouritism. However, in order for it to still be valid, you must proceed directly to the next available sailing. So that means you can't travel to Swartz Bay, and then have lunch in Sidney for a couple of hours, and then head back to Swartz Bay to finish the connection.