I just froze/defrosted a char yesterday. Would've SS'd it for you if I'd seen this thread sooner but I believe you can understand how it works without one. I'll just tell you what happened to my char.
Your char will be frozen on an as/is basis. You simply go into MyShop and buy a time capsule. This seems to be some sort of passive item as I can never find it in my inventory to take it out, so just buy it and you're set. Go to "freeze" and it'll ask you if you're sure you want to freeze it. It'll also tell you how many time capsules you have and you need at least one to freeze your char obviously. The counter will be at 1 if you already have bought a capsule.
When you want to defrost a char, just select that option and pick the char you want. You don't need another time capsule to defrost characters so the ONLY time you need to buy one, is when you're freezing a char.