Heres how Ellen Finkelstein runs you through the wipeout command
To create a wipeout:
1. Select Draw > Wipeout from the AutoCAD main menu.
2. At the Specify first point or [Frames/Polyline] <Polyline>: prompt, specify the first point of a polygonal shape to cover existing objects. To use an existing polyline, right-click and choose Polyline. Then select the polyline and choose whether to erase the polyline. (The polyline must be closed, made up of line segments only—no arcs—and have a zero width.)
3. At the Specify next point or [Undo]: prompt, if you specified a point, specify the next point.
4. At the Specify next point or [Close/Undo]: prompt, specify another point or use the Close option to close the wipeout shape. Continue to specify points until you have the shape you want. You can also press Enter to end the command.
By default, the wipeout has a frame around it, using the current layer’s color. You can hide the frames of all wipeouts. Start the WIPEOUT command, choose the Frames option, and choose Off.
A Wipeout object functions like a raster image, so it has the same requirements for plotting that raster images have—you need a raster-capable plotter with a suitable driver. You may also have problems using wipeouts on a model layout in 3D drawings, but they work fine on a paper space layout.