Ah right so for normal driving the little stick should always be in the high position (or just not in low)?
Yes, for normal driving it should be in the High position. Think of it like a second separate gear box, with two gears and neutral. It is a similar principal to a bicycle. The normal gear box would be the gears on the rear wheel and the transfer box would be the gears on the pedals.
Day to day driving will all be done in High range, off road driving will all be done in low range, and occasionally if you are very heavily loaded of pulling a large trailer you will need to pull away in low range, and then change to high range once moving this requires a bit of practice to master).
This is the same gear-stick which engages diff lock by moving it to the left (in any position L/N/H)