Generally, yeah, you're moving the spacers from below to above the stem, but there is a bit more to it than just the cap. There are an awful lot of bad instructions out there... this utube is ok

http://www.youtube.com/watch?v=2jxNmXbOUiQ

order of operations
- remove top cap
- loosen stem bolts (if you are using a bike stand, support wheel so it doesn't fall out)
- remove stem
- remove spacers
- replace stem, put the spacers on top, make sure everything is vertically tight
- install top cap (just tight enough, see below)
- align handlebars
- tighten stem clamp

Important bits:
Always grease bolts.

Tighten the top cap "just enough" - just enough is so it compresses the headset & spacer stack just enough so that when you apply the front brake and try to move the bike front and back, there is no play in the front end. This isn't very tight, you don't crank it down. If you crank it down too hard, the steer tube won't turn freely in the headset. Start pretty darn loose, do the brake check, if it clunks, tighten it a half turn, repeat until clunking goes away.

Tighten the stem onto the steer tube to the torque rating for the stem, which is pretty darn tight if you don't have a torque wrench. Not like, as tight as you can possibly make it, but pretty tight. I like to tighten the two bolts "alternating" - tighten them both slightly, then alternate tightening them each a little more, so that you are applying even pressure on the top & bottom of the stem clamp.