So, the rangefinder tells you how far away the central point with respect to the lens is from the camera. Then you have to adjust the focus to match that number or compensate to whatever it is you want to focus on? This would make fine focus adjustments almost of a guess work then? Does the range show up in the viewfinder then, or is it on a separate display, or is it a mechanical thing?
So a camera is basically a lightsealed box + shutter + lens. Later they added a viewfinder to assist with the framing of a shot. Focus set via a guess, zone focusing. To increase the accuracy of focus on these cameras, many allowed for an accessory to mount to the shoe. This accessory was a rangefinder. These older cameras operated just as you suspect:
1) Determine the distance of subject via the rangefinder
2) Set the lens to focus at that distance
3) Frame your shot via the viewfinder
4) Take the shot.
See example:
http://www.pacificrimcamera.com/pp/leica/sm/a.htm
(note: the rangefinder cold shoe attachment at the bottom)
Later, the rangefinder was incorporated into the body and couple to the lens. These are the cameras that are known as "rangefinder cameras". Leica III series for example had two holes to look through. One had the rangefinder and the other had the viewfinder.
See example:
http://www.pacificrimcamera.com/pp/leica/sm/iiib.htm
(note: the photo showing the rear viewfinder and rangefinder)
The way the rangefinder operated was that you would look through the rangefinder. What you are presented is a double image of the object you want to focus. Turning the dial will move the overlapping image. Once you turn the dial so that the two images overlap completely (as if it were a single image again) the lens is focused. It is much much faster than it sounds. If the a rangefinder camera is "coupled" this means that the lens and the rangefinder are mechanically tied together thus aligning the rangefinder patch is done by turning the focusing dial of the lens... thus making focusing a one step process. Therefore taking a photo is now just:
1) Align the rangefinder patch with the object (thus establishing focus)
2) Compose the photo in the viewfinder (switching to the other viewing hole)
3) Snapping the photo.
Later rangefinders took it even a step farther and incorporated the viewfinder and rangefinder into a single unit. This allowed for focusing (aligning the rangefinder patch) and composing fast and easy. My Canon IVSB has this feature and a little later the Leica M3.
http://www.pacificrimcamera.com/pp/leica/m/m3.htm
To the trained individual, a rangefinder camera can actually be faster (and accurate) to focus, compose, and trigger than even the most advanced AF SLRs today. At this point, you simply align patch, compose, and trigger all without moving your eye.
Up to this point, you still had to determine exposure. Even more advances incorporated TTL metering like the Leica M5 (and on to the M6).