I've always seen the voltage regulator mounted with the resistor "in" and the coils and points "out". Does yours have a cover? If so, the cover should have green, white, and black marks on it to show where the green, white, and black wires attach.
Black is from the battery. Green is ground. These two wires power the electromagnet coil in the regulator. White goes to the alternator's field coil (another electromagnet) so the magnetic field in the alternator becomes stronger or weaker as needed. As strynboen said, there are three states. I'll call them full voltage, reduced voltage, and lowest voltage.
Modern voltage regulators control voltage by "leaking" some current to ground which drags down the voltage. Modern alternators use permanent magnets and always generate everything they can at any RPM. They are different, but not actually "better" than this older system. This system with field coils generates only what's needed.