The rotation arm allows you to control how much the mast rotates relative to the boom/sail. Changing the rotation allows you to fine tune the leading edge of the rig and also effects how the mast bends. There should be a clam cleat on the top of the boom about 12" back from the front. The rotation line ties off to the cleat, passes through the opening in the rotation arm and then leads back to the cleat to allow adjustment. The general rule of thumb for an upwind setting is to sight through the mast and point the rotation arm somewhere between the outside corner of the rear crossbar and the shroud. For downwind, let it off completely. For casual sailing, it is pretty much a set and forget adjustment.
For downhaul kits, I only know of the one sold by Murrays which gives a 5:1 purchase and is pretty much turn key installation. Otherwise, most people customize the downhaul to their specific needs.