It can be used as an addition to simple questions:
"Cómo estás?" "Bien, po!"
"Quieres tomar una cerveza?" Sí, po!"
"Estás cansado?" "No, po!"
It really comes into its own in more humorous situations:
"Estás borracho de nuevo hueón?" "Yaaaaa, po!"
"Vamos a la chucha?" "Vamos, po!"
Certainly you can you survive in Chile without a firm grasp of the word 'po.' But it's not nearly as fun and you'll be missing out on an important piece of the culture. So the next time you want to answer with a little more energy, throw a 'po' in there. I promise you'll get a great reaction.