I had a hard time wrapping my head around hotstrings too, but once I understood what they actually were, it all fell into place.

Here's a very basic intro to hotstrings.
So here we have our two test characters, a priest and a mage. Now to get straight into it, let's say that when I press 1 (Fireball) on the mage, I want the Priest window to hit 0 (Smite), this can be done using hotstrings.

Mage


Priest


Step 1
Click Setup on Keyclone and click on Keymap editor in the side menu.


Step 2
Enter the ingame key for Fireball into the key field (which in this case is 1) and enter a hotstring into the hotstring field, this can be anything, for this example, let's enter test. After that's done, click add.


Step 3
Now click save to save the keymap as a file, for this, I'll name it A.


Step 4
Now click new at the top and repeat the step, entering the same name for the hotstring, ie. test, but this time using 0 as the key (0 is the ingame key for smite on our Priest).


Step 5
Now click save again, but name it something different, logically, I'll name this one B.


Step 6
Now that the hotstrings are set up, we need to tell keyclone which keymaps to use for each window, so click Ok to leave the keyclone setup panel and return to the main keyclone window.


Now in this example, the top WoW instance in the list is the Mage and the bottom one is the Priest, so right click on the top WoW in the list and click on Load keymap, then select A.kcl and hit OK. For the bottom one, do the same, but load B.kcl instead.


Step 7
Now switch back to WoW, specifically, the Mage window, make sure both the Mage and the Priest have an enemy target selected, then hit the 1 key on the Mage, the 0 key will be pressed on the Priest and they will both fire off their spells.


[s]Note: This behaviour will not be reversed, hitting 0 on the Priest will not hit 1 on the Mage, to do that, you will need to add in another hotstring.[/s]
Edit: Hitting 0 on the Priest will hit 1 on the mage.

Hope that helps someone