with the printed pattern facing you, lay down the first piece - back of fabric facing you - and the second piece right side facing up. allow about a 1/4" seam to the right of the stitching line.
another way too look at it is to picture a sandwich. the bottom layer is the second piece, right side facing up. the middle is the first piece, back of fabric facing up. the top layer is the pattern, with the printed side facing up so you can see the stitching lines.
you'll use this system for pieces 3 and beyond, too. the next piece being added will be the bottom layer, the piece already attached to the paper will be the middle, and the pattern will always be on top.
to place your pieces and get about a 1/4" seam allowance, you can fold back the pattern and measure obsessively; or you can "eyeball" it; or you can draw reference lines on the patter. whichever works best for you.