The image and text is displayed automatically from the first article in the selected category. The module can be found in the “modules” section of the administration page. If you look on the far right of the screen there is a column called “type” look for “mod_catslwi” (it might be on the 2nd page of modules). The name of the module is what’s displayed above the images kind of like a title bar.
In the module you can change which categories are displayed. I suggest choosing no more than three categories.
The first article (whichever is in the #1 position) from each category will be displayed automatically.
The popup text and image is taken from the article and is automatic. If you use a Read More break then you can write a small blurb to fit the popup and also put an image there. (there are a number of posts explaining how to do this elsewhere).