Hope I don't get killed for asking this, but I just can figure it out from game play and google. I have Co8 installed. Simply how does this work? Must I put each character in Ready vs Approach while not in combat mode (movement and attack bars on left) not move the character and hope an enemy walks up to them to get an additional attack? Any help with explanations would be appreciated.

The 'Ready vs Approach' option is there to supply the AI with an option to get the first action when an enemy enters melee range. It's like a super initiative check. That's all there is to it, in a nutshell.

Just adding it's not an extra attack, you give it on your combat turn and then your guy just waits.
If nobody comes close, you've essentially lost a turn.

And yeah, you need to give it to every character every turn you want them to ready.
But it's worth it, and one of the commads you're better off making a key shortcut for.

Yeah you essentially give up one character's combat turn, in exchange for them getting a preemptive attack against any one enemy who moves into their melee range. They stay readied until something approaches, or their next turn.

It's handy for if you don't really want your characters to move anyways (ie. they're set up as roadblocks). It's really nice if you have a character with the Improved Trip feat, because you can essentially rob an approaching enemy of their turn, tripping them before they get the chance to attack at all.

I agree, it's a good one to set up as a key shortcut.