The Stones were used by the Dunedain to keep an eye on their borders and for communication. The event that passed between Arvedui and the Council of Gondor when he claimed the crown was via the Palantir.
Doubtless they were used in the consultations between Arnor and Gondor
in the year 1944 concerning the succession to the Crown. [The
Palantiri; Note 1]
Pippin asked Gandalf a similar question to your own.
What did the Men of old use them for?
To see far off, and to converse with one another... in that way they
long guarded and united the realm of Gondor. [The Palantir]
He said that the Orthanc Stone "alone could do nothing but see small images of things far off and days remote." [The Palantir]
The Stones could not see in the dark, but it could see through things like into a room as long as it was lit. It could make remote objects clear to the viewer and could not read an unwilling mind. Its use could be straining on the person using it especially when they had to focus hard. In Note 18 to The Palantiri it is said,
The greater palantiri could look much further than the lesser; for the
lesser the 'proper distance' was of the order of five hundred miles,
as between the Orthanc stone and that of Arnor.
The two large Stones which I mention below can see significantly further than the 500 miles distance of the lesser Stones with a fixed orientation.
used a Stone for the transference of his superior will, dominating the
weaker surveyor and forcing him to reveal hidden thought and to submit
to commands. [The Palantíri, Note #5]
There were 7 Stones divided between the two kingdoms.
Orthanc-stone - Isengard, had a fixed orientation.
Arnor-stone = Minas Tirith, had a fixed orientation.
Ithil-stone = Minas Ithil, it was thought to be either lost or captured by Sauron. It had a fixed orientation.
Osgiliath-stone = Osgiliath, it was the master stone and could eavesdrop on 2 other stones in communion, other stones could not do this, they would just see the stones as blank. It was a big stone that could only be lifted by more than one man. It was lost in the waters when King Eldacar was attacked the the tower burned. It could be revolved and still see in any direction.
Amon Sûl-stone = The chief stone of the North; it was the largest and most powerful stone, mainly used to communicate with Gondor. It had to be lifted by more than one man. It was lost at sea. It could be revolved and still see in any direction.
Elendil Stone = Emyn Beraid, was not used for communication, but rather to look to the West where even Eressëa could be seen.
Annúminas-stone = Annúminas, Fornost, was lost in the sea. It had a fixed orientation.