What StreetPass is, is a feature on the 3DS that exchanges a small amount of data when you pass by another person with a 3DS. For this to work both 3DS systems must be in sleep mode (just turn on the system and close the screen, do NOT power it off). The wireless switch must be turned on as well for it to work.
Now to set up StreetPass you want to go to the StreetPass Mii Plaza on your 3DS and select the Mii you want to send via StreetPass (When you pass other people they will receive your Mii and be able to play with him in StreetPass Quest & Find Mii and StreetPass Puzzles.)
Sometimes game data is exchanged as well if StreetPass is activated for your games (It asks you when you first play them I think). For example when you StreetPass someone with Mario Kart 7 you will get their Mii and can race against their Mii.
I will be bringing my 3DS in sleep mode with me and my games to RuneFest if of course it's in NYC! So be prepared to pick from ALL of my pink puzzle pieces! They are the rare ones you can only get from StreetPassing!