How To Knit A Swatch
A typical swatch is 20 stitches by 40 rows. But the bigger swatch you can make the better.
Also, it is usually best to use the same stitch in your swatch that you are going to be using in the piece. Like use the particular lace stitch, color st, etc. Or if it is plain stockinette st or garter st, use that.
Sometimes people like to knit swatches just to see what different stitches look like with different types of yarn. If you are really creative, you might find that you like to knit quite a few different swatches with different size needles to find the exact texture you are looking for in your garment. Smaller needles will make a tighter knit.
After knitting your swatch, if you really want to be accurate, you should wash and block it, and then measure.
Also, when you are measuring, count your number of stitches across several inches, and then divide back by that number of stitches. You could very well end up with a decimal number, which will give you a more accurate gauge.
But if you are in a hurry, and like to take risks - just knit a small, quick swatch, and measure it.
What does a "Multiple of 17 sts plus 2" mean?
It means that there are always going to be two extra stitches at the end of the row to finish up the pattern. If you only repeat the pattern once across the row (like if you were knitting a swatch), you would be knitting over 19 stitches (17+2)
If you want to repeat the pattern across 5 times, you will need 87 sts --first you multiply 5 times 17, then add two.
If you want to repeat the pattern 15 times, you multiply 15 times 17, and then add two (257)
How about a "Multiple of 4 sts plus 1"?
It means the same thing. You repeat a multiple of 4 across the row, and then finish up with that last little stitch. The reason you are given this little math problem for each knitting stitch is so that you will cast on the right number of stitches.
Just thinking about it will drive your mind crazy. But if you take the time to knit up a few swatches you'll start to understand why this works. Many patterns, especially the more exotic lace patterns, need to close off the final edge so that they look nice.
Just try it, you'll see that it works.