The Lost Cousins tab shows you people you have found on a census but have yet to enter onto Lost Cousins. Note this uses a Custom Fact called "Lost Cousins" which you will need to add to your FHP and record against those you have entered at the Lost Cousins Website.
For creating Custom Facts, please see the section in the documentation "Using FTAnalyzer with popular Family History Programs" and then choose the Family History Program.
This report will then show you a list of people that you have entered for that census year but have not recorded a Lost Cousins Fact.
NB. by default it only lists direct ancestors, blood relatives and those married to directs or blood. Tick the other filter boxes to show other relationships.
The idea of the Lost Cousins tab report is essentially that it should always be blank indicating that everyone for whom you have a census entry is already tagged as entered into the Lost Cousins website.