When you create your application from the Xcode template, simply check the “Show Application in Newsstand” to enable Newsstand support.
You can enable background downloading by checking “Download Content using Newsstand Kit framework”. This option should only be checked if you plan to support the zipped content format. If you don't check this option, Pugpig will not be able to download content in the background when it receives a push notification that your content has updated.
To submit a Newsstand app you must offer at least one auto-renewable InApp Purchase subscription. See Adding iTunes subscriptions for more information on using a subscription with Pugpig. You will also need to configure a UINewsstandIcon icon in your plist file, as documented here.