If you install OSMC onto an SD card, it will boot up and load Kodi (what was previously known as XBMC). You don’t really need to use 2 cards, you can install both OS’s on the same one if you use NOOBS. Note that installing NOOBS on your SD requires formatting it (which means everything in it will be deleted), so back up any data you might have in there.
You will need an internet connection in order to install OSMC from NOOBS. Be sure to install all the OS’s you want when running NOOBS for the first time, because if you want to install another one you will probably need to format again (but I highly doubt you will need anything other than Raspbian and OSMC).
One last note: If it’s a Pi2, make sure you pick a Pi2 OS from the NOOBS menu for optimal performance.
What you need is a Kodi tutorial. You can find some on Youtube, look for something like “best addons for Kodi” or “Kodi tutorial”. Kodi is an excellent media server for both legal and not-so-legal usage (just don’t expect help with the not-so-legal aspect on this forum).
Rick, it sort of depends what you want to do with it. Are you wanting to play films that you already have as files on your PC or are you wanting to use it to stream content from the Internet (BBC iPlayer, YouTube etc.)? There are a few different use cases.
As misled3k says, there are a bunch of Kodi tutorials out there. Kodi (used to be called XBMC) is the software you are actually using, OSMC is the operating system as a whole that wraps it all up for you.