ok, figured it out, easier to explain with a screenshot.
"E" key brings up periscope overlay.
"V" key switches between "V" and "H" scale.
use right, left, up, down arrows to navigate through menu.
To use "V" scale, 1) ID ship, in this case "Heavy Tanker 12"; 2) determine height that you will measure. In this case, top of mast which is 28 meters; 3) scroll through menu until 28 height is at top of overlay.
note that table will automatically switch between 1.5x or 6x magnification depending what you are using.
measuring height to top of mast gives you 80 milliradians which on the scale gives a result of 12.8. Multiply by 100 gives you distance of 1280 meters.
"H" scale works on the same principle, except you are using length of ship measured on horizontal plane.
p.s. - this is a very nice addition, much easier to use than the previous method.