The Machine Gun is a ranged weapon that fires bullets. To load the Machine Gun push Shift + Right-Click while holding an ammo loader and the GUI will open up so that you can load ammunition. Once the ammo loader contains bullets the Machine Gun will fire from that reserve.
Note: on creative mode, loading the machine gun is unnecessary.
The machine gun causes crashes in version 1.0 on multiplayer, but is fixed as of v1.1.