I'm trying to determine how landed costs work. I have selected which items for which I want to have landed costs calculated. I then entered the shipping costs as an expense? My understanding is that the landed costs helps adjust the cogs to account for the shipping. When does this happen? Is it possible to see how the costs have been adjusted due to the landed cost be included?

Yes, you have to associate the vendor bill for which you received the landed costs to the item receipt under the "landed costs" tab. You have to create the appropriate landed cost categories, and associate to each line item on the bills before being able to associate bills to item receipts