If you take a look at Tables 90, 91, and 92, you will see the comprehensive combat sequences for melee, missiles, and magic. It may look like a lot to take in at first, but if you look at just phase 2 of each combat variety, you will see that it usually comes into play only when the PC (or perhaps your monster / NPC) wishes to move a good deal before or after engaging. Most of the time, players are not going to want to go at the end of the round, so they will elect to take actions that they will complete in phase 1, but exceptions can occur! For example, a magician might want to move 15 feet diagonal to her left before unleashing that AoE spell, such as fireball. Or, a fighter might want more than a half move (15 feet) in his scale armour before attacking. He might want to move his full 30 feet, then attack, which puts him at phase 2. (Of course, said fighter can opt to bridge the 30 feet in phase 1, should he elect to make a charge attack.) 

My group and I were also overwhelmed by it at first. I pulled out a dry erase board and charted the two phases for everyone involved with it for a couple of combats. That really helped things come together in our heads and we realized it's as easy as Ghul described it above.
Now it's easy, and feels much more realistic than non-phased rounds.

I find that after a while you rarely have to think about it. If the player wants to move, it's fairly likely any other action will come on phase 2, so that's a good time to think about it. For characters with multiple attacks, I think it's up to the player to tell you how s/he wants to divide them among the phases; otherwise, just assume it's all phase 1.

Michael Pfaff wrote:

After the first round, I basically threw my hands up and just did a single phase, adjudicating some people going later in the round than others based on their distance and choice of action. 
 

I think this is legit as well.

All is revealed on Maezar's Sheet.

Ghul wrote:

Fellows, Maezar's sheet is excellent, but I do recall that it has one or two errors (or maybe not errors for Maezar, but merely how he runs combat in his games). There is nothing wrong with using Maezar's interpretation, which is about 95% "by the book", but if you do want the official presentation, please see tables 90, 91, and 92. 

From going over the tables, cheat sheets, thread, and playing, it is clear to me now.
9 times out of 10 phase 2 will not be used except with movement or hold actions.

Ghul wrote:

Fellows, Maezar's sheet is excellent, but I do recall that it has one or two errors (or maybe not errors for Maezar, but merely how he runs combat in his games)

 I find this visual interpretation nicely intuitive. I wonder if a visual chart like this may be handy for the Hyperborea Resources page...

The easiest, simplest way to grasp phased combat is this: Most everything happens on phase one, unless the PCs or monsters are trying to do something extra that is going to force them to act at the end of the round (phase 2).

This could mean moving ½ and then casting a spell. Normally a spell fires on phase 1, unless the spell caster wants to move.

Another example is taking a full movement before melee attacking (½ move on phase 1, ½ move and attack on phase 2). Because in a normal phase 1 situation, it's just move ½ and attack, but if your fighter has a MV 30 and his opponent is 25 feet away, he is going to go at the end of the round. For many more examples, see tables 90, 91, and 92.