My understanding is that you place it over the damaged area and hand sew the tulle down. You could tack it down in places if the area is large. You don't normally quilt over the tulle, but you certainly could. I will see if I can find some websites that show this kind of repair work.
Edit: Looks like you can certainly quilt over the tulle. Here are some websites to check out:
http://www.annquilts.com/quiltrepair.html
http://forum.apqs.com/index.php?/top...iring-a-quilt/
http://antique-marks.com/antique-quilts.html
Just as an aside, I think there are different varieties of tulle. You want the kind that is super-soft.