The first part - your overall availability - can be specified for both organisations and for individuals Open an editor for either a person or organisation and you'll find (at the bottom of the editor pane) a tab labelled "Availability". This shows the availability records that have been defined. Each record has a from and to date ("..." means "forever" in this context, either in the past for the "from" date, or in the future for the "to" date). For each day of the week you can either specify a specific number of hours or inherit the hours specified on another person or organisation.
By default organisations at the top level (that is organisations with no parent organisation) are created with availability of 8 hours on Monday to Friday. Sub-organisations or persons within an organisation are created to inherit availability from their parent organisation. So for example public holidays can be defined by adding availability records at the top level and personal holidays defined on the individual person in the same way.
The second part of defining availability is to divide your time between one or more projects. When the Project Manager adds a resource to his team he must specify the percentage availability (default 100%) and the from and to dates for this person (defaults to the start and end of the project). To change the percentage of time available to any one project, hit the "Resources" button in the Project Manager perspective "Tools" panel, or open the project editor and go to the "Available Resources" tab. You can then select the relevant person and use the "Manage Project Availability for..." button. Again availability records can be added for a period specifying a percentage of the overall time the person is available on each day of the week. (The default in this case is 100% each day.)