Great question Richard! A lot of people are interested in this topic! Here is my experience:
When you have the backlinks, you must upload a list of the links to disavow. Here how you do this:
1. Go to the disavow links tool page.
2. Select your website (you might have more then one - so be careful!).
3. Click on the "Disavow links" button.
4. Click on "Choose file".
You can always remove or change the text file you've submitted. Here's how:
1. On the Webmaster Tools home page, click the site you want.
2. On the Dashboard, click Traffic, and then click Links to Your Site.
3. Under Who links the most, click More.
4. Click Download more sample links. If you click Download latest links, you'll see dates as well.
Download the text file, change it's content and upload again! Make sure that you put the right backlinks! A lot of research is needed prior to using the disavow tool!
Google also give an option for the text you are going to upload. You can add this type of information:
#example.com removed most links, but missed these
# Contacted owner of shadyseo.com on 7/1/2012 to
# ask for link removal but got no response
So, as you can see it is advisable to contact the site's owner with a request for link removal. This can be very hard as a lot of developers simply have no time. And no other actions can be taken - so by using the disavow tool you can hope that Google will re-gain your ranking and good SERPs positions!