It's really incredibly simple, go to Options > Controls, make sure wheel / joystick is selected at the top, then click Axes / FF (it's the rightmost button of the small ones in the middle of the screen).
Now you'll see all available axes on the right side of the screen. At the top of that view, make sure the axes are unlocked, i.e. the "unlock" button's text is white. If you turn the wheel or operate the pedals, the bars on the right side will move. You may have to turn the wheel from lock to lock and fully depress all pedals to calibrate them.
From there on, your wheel and pedals are calibrated, meaning their full range of motion is recognized by LFS (and the wheel driver, which by itself can only calibrate the wheel, that's why it rotates from side to side on startup).
To get everything working, you simply select a function on the left side (actually more like the centre, but it's left of the axes list) by clicking it, for example Steer, and then the axis you want to assign to it, again by clicking it. If you don't know which axis does what, simply rotate the wheel or depress the pedal you're looking for and the bar next to it will move.