What I am trying to do is create a custom module and be able to from this module select a contact to be associated with this.
But am a bit lost on how to do this.
I have created the module and made the relationship, but for the life of me cannot figure out how to create the area where you can select the client? i can see it can be done thorough the subpanel, is this the only way?
What type of relationship did you create a many to many? I think you need to delete that relationship and create a one to many from your custom module to contacts. It tells you in studio when creating the relationships that a one to many produces a related field on One side and a subpanel on many side. Many to many relationships give a subpanel to both sides. Make sense?
If you just want to associate a contact with your custom module then you can also create a relate field in your custom module and link to contacts & make it compulsory.