This (pinned) discussion covers some questions regarding TestFlight testing I answered by mail or addressed in other posts - and it's open for additional questions or other contributions.
Installation
Testing an app with TestFlight is just like installing an update and using the app as you're used to. Because it is no official release the installation has to be done using Apple's "TestFlight" app - let's call it an App Store for prereleases, either individually assigned to you or publicly available via links (like StitchBuddy). Here is some information from Apple about TestFlight, although I found them quite verbose: Just install and use the app You can even test In-App purchases, which are not charged when done with a beta version. In case anything goes wrong, you can (1.) provide feedback - through the TestFlight app (or of course directly), and (2.) reinstall the last official release from the App Store.
The last step should also be done when a test has ended - the beta version will expire after 90 days the lastest: This way you are sure to use the official release again, and receive future updates.
Existing Data
Installing a test version via TestFlight is not touching existent data, but only replacing the app itself like any update from the App Store.
Of course beta versions are less tested, and therefore more likely to harm data by any error than an official release. But let's be honest: Data corruption could happen with App Store releases, too. That's why I highly recommend to keep up-to-date backup copies of your data in any case!