Others here may likely expound further, Pam, but as long as your HydroHot is on your bay heater outlet will kick on anytime the thermostat down there senses about 40 some degrees. Your diesel HydroHot switch will provide the most energy to the system. The electric switch can save some diesel fuel, especially if you are hooked up to park power, but it is less effective than the diesel burner, and is mostly for helping to maintain a heat level that the diesel has already attained for the system. If hooked to park power it is best to leave both switches on, but with very low demand you can get by with just the electric side alone. Also, while on the highway the engine exchanges heat with the HydoHot automatically so the HydroHot's burner doesn't have to use fuel then, and upon arrival at a camping spot your system is already hot by way of the engine. And before you leave a campsite, if you turn on the Engine Preheat switch next to the Diesel and Electric switches, about 15 to 30 minutes before leaving, the HydroHot will pump fluid to warm the engine for a more efficient startup - especially useful in winter or on cold mountain mornings; remember to turn that switch off just before pulling out.
If you want a lot of hot water, such as taking a shower, you will want to be sure the diesel burner switch is on, because the electric side alone won't keep up with enough hot water. Also be aware that hot water has the priority over space heat. So if you hear your floor vent heat exchanger fans running and then turn on and run a lot of hot water somewhere, you'll likely notice the vent fans shut off to make sure there's plenty of hot water. Water circulates through the HydroHot to be heated before going to your Hot spigots. The engine's hot coolant similarly delivers heat via an exchanger in the HydroHot, and when the engine is cold a pump in the HydroHot returns the favor. Additionally, a special antifreeze circulates via pumps through blue and red tubing you may have seen here and there in bays and under cabinets. The red tubes carry hot fluid to your floor heat vents where small fans extract heat and blow it into the room. The blue tubes return the cooler fluid back to the HydroHot for heating again. So your HydroHot is your furnace and hot water heater all in one.
In cold weather your electric side may not be able to keep up with heating the coach by itself, and/or if you are using much hot water. So that could be why the one time you used the furnace you needed both diesel and electric switches on.
If your '06 is like mine, there should be a winterizing kit already installed in with the water pump, which is behind a small removable carpeted panel on the left wall of the main curbside storage bay. If you have trouble locating it, I will be glad to supply a photo to help. You need of course to drain everything first by way of the valves in your waterbay and its manifold. Shutoff valves on the lines in with the water pump can be opened to let water drain out also, including the one next to the filter for the fridge icemaker. The hose from the kit goes into jugs of pink RV winterizing antifreeze, the valve from the water tank is shut off, and by turning on faucets, shower valves, water bay shower, icemaker valve, and toilet valve, the water pump moves the antifreeze through your tubes. As the "pink stuff" shows up at each outlet, turn it off and move on to the next. Be sure you do both cold and HOT! It is almost imperative that you pump RV antifreeze through the HydroHot to protect its coils - many winterize by blowing air through their water lines, but that may not be enough to secure the HydroHot's coils, so use antifreeze at the very least until you see it exit at least one hot water faucet.
Two areas that are special (beyond protecting the HydroHot from freezing) are the fridge icemaker and any washer/dryer. You should learn how to manually cycle the icemaker to insure protective fluid gets through it. But the coach should already have from the factory a foil heat tape around the icemaker's valve above the solenoid in the back of the fridge; as long as your 12 v. batteries aren't depleted, the heat tape should keep any undrained water in the valve from freezing and breaking it. The tape comes on at 38 degrees and goes off at 48. As for our washer, we simply follow Splendide's directions in their manual and add a cup or so of antifreeze in the drum and spin cycle once.
Alternatively, if we think we might use the coach during the winter sometime, rather than have to dewinterize and rewinterize during storage, I've just gone out during cold snaps here in the Willamette Valley and turned on the HydroHot on electric and set the front thermostat at 40 degrees. I might add a small space heater on low, but rarely. As long as the HydroHot is on, electric or diesel or both, the bay thermostat and vent protects waste tanks and lines down there; the HydroHot protects itself and adjacent water tank by virtue of just being on. My tanks aren't really at risk anyway since they are usually empty, but any residual water elsewhere won't freeze. All that said, there is always a chance of a power outage, either at your park power source or on the coach, so the electric side of the HydroHot wouldn't run. Even if the diesel were on, without a 120 volt battery charger the batteries would eventually run down to where the burner might fail. So if you don't winterize the rig, and rely on onboard heating during storage, you should keep it where you can regularly check on things, daily if possible during subzero weather.
Joel
I see Gerald beat me to it, and with a much more succinct reply to your questions. He is much more efficient with words than this old windbag