Am I doing it right?

[breyman]

+1 on the others' comments. That piece is a secondary suspension that helps keep things tighter up against you. There should be an s-biner at each end. You should clip each s-biner to the suspension just above the gathered material at each end. Make sure the head is oriented correctly - it's the side with the HG logo patch.

[Boomer]

it's the side with the HG logo patch.

On the current model, the logo patch should be at your left shoulder. It varied on older ones (including "custom made by Stormcrow"). If you look at the photo on their website, you can visually see the differential cut for the body & the leg 'shelf'. The baffles are deeper on the body section:

http://www.hammockgear.com/incubator-0-long/