SRTie4k: Does anyone know how it works?
As I recall NoTR is just "integrated" into the game, so it's not like you can choose to play the expansion and then start in an entirely new spot, no. Basically you start a new game, and on your way to the first town you run into some new NPCs who will give you a heads up about the new stuff that is going on in the world. If i recall correctly, once you've completed the addon MQ, you can resume the original MQ from there. So it's kinda like a "new version" of G2 with lots of added stuff.
I'm not sure whether NoTR comes preinstalled with the GoG version or not. If not, I think NoTR just backups and moves all your old savegames upon install, so in a way you'll have to "start over".
Also, NoTR adds elements that make the original game significantly harder by boosting enemies and making helpful potions and plants scarcer. Taking on a human enemy is very challenging now, and especially early in the game most human enemies are capable of one-hit killing you. Note that it was done due to community pressure to actually make the game harder. Also most weapon statistics have been changed, and the cost to increase your skills rises dramatically at breakpoints. For example, to go from 30 to 60 strength will cost 60 skill points, and from 60 to 90 will cost 120 skill points. So forget about creating that powerful warlock-thief wielding a two-handed axe, now you really have to specialize to survive or the new monsters will have you for lunch pretty quickly.