I stumbled on a kind of simple (and fun!) way to use the Plot Sequence Report, kind of unorthodox perhaps but it has been working for me. Or maybe people do it this way all the time?
Obviously it works best if you are working on a particular throughline on its own, encoding signposts for a throughline, or asking yourself e.g. "what happens in the MC Throughline in Act 3"? If you know which throughline and act/signpost, you know where to look in the PSR.
Step 1: Don't use the PSR!
That's right, the first step is not to use it. Just don't look at it, put it away. (It's okay if you've looked before, just try not to think about it.)
Step 2: Still don't use the PSR!
Work on your story outlining / signpost encoding. You can and should use your storyform appreciations and especially the signpost Types to guide your ideas, but don't look at the PSR.
Step 3: When you get stuck or something doesn't feel right, go to the PSR for support
Okay, you've got some good ideas down but something doesn't seem quite right, or you get stuck and don't know how to resolve it... now is the time to refer to the Plot Sequence Report. First, if you're encoding a Signpost for a particular throughline, great -- you know exactly where to look in the PSR. If not, figure out which Act you're in and make some guesses as to what throughline the problematic section applies to.
Then, look at the PSR Variations and see how they might fit with that part of the throughline story. Use it to get ideas, to tweak or refine your current ideas. (Oh wait, this part is really their shared Fantasy, I can let loose and have them be totally fanciful since it doesn't need to be real; that will work so much better.) Sometimes you might only glance at the PSR, almost like you want your subconscious to read it without you!
Step 4: When you're done, go back and look at the PSR for refinement
There may have been some places where you didn't use the PSR at all, or just glanced at it for an idea or two. But I bet if you go back to your story outline after it's done, you'll see many of the PSR variations in places where you didn't even try to put them (and often your muse's ideas are really neat ways of encoding the Variation).
Sometimes you may see you've encoded Variations but a bit vaguely, so check if focusing on the real dramatic potential of the Variation might improve that section.
Also you might find areas where one or more PSR Variations are missing entirely. If you're happy with that part of the story, don't worry about it. But this could be a sign something is a bit off, so just consider how tweaking it a bit to incorporate the missing Variation(s) might make your story even better.
Thoughts? Love to hear feedback if you try it.
There is an optional Step 5 but I didn't want to include it in the first post because I didn't want to scare people!