Feel the cable-tension between the shifter and RD body. It should be taut when in it's most relaxed gear - the smallest cog on the cassette. Not TIGHT - but taut. Not being to see your clockwise, right, counter-clockwise, etc. from here - twist it 1/2 turn and feel the cable. Is it tighter? Or looser?
Go from there.
Here's Park Tool on adjusting the RD:
http://www.parktool.com/repair/readhowto.asp?id=64
And here's a video on the same subject - thank you Alex Ramon:
http://bicycletutor.com/adjust-rear-derailleur/