I'm having extreme difficulty following a rhythm using a metronome. Granted, I can't sightread yet so that may be the problem. Trying to play a piece I know very well by ear and matching it with the metronome beats (in any tempo) is incredibly hard for me, the offbeat notes keep escaping me, as if I was concentrating more on the actual metronome than the piece.
Am I using the metronome in an incorrect manner?
Playing with a metronome can be a challenge but can help tremendously with achieving proper timing when playing a musical piece as well as refining your ability to maintain the overall tempo throughout the song.
I find that the digital metronomes that allow you to choose from a large number of different beats where you can have the accent beat where it needs to be to establish the proper "groove" for the music - is much easier to adapt to than the old wind up metronomes that only tick tock like a grandfather clock.
What I personally find I must do on a complex timing piece when trying to learn it by using a metronome, is to slow the metronome down to a ridiculously slow tempo. This give me time to think about the next note before the metronome clicks and makes it easy to land my finger on the note at the same time the metronome clicks. Sometimes I will even double the tempo but play at half that speed so I have an in between phantom (not supposed to be there) reference click in between the real clicks. This trick is especially helpful if some notes get played on an off beat.
It also helps to break out the song into small segments - even as small as two measures at a time and gradually add the others until I can play an entire verse.
After you are able to play it at the ridiculously slow tempo, start speeding it up gradually until you are able to play it accurately at the new faster tempo. Repeat this process until you can play full tempo (or faster).
As others have said, counting aloud can be extremely helpful because it helps you connect to the beat in a manner that reflects where you are in each measure and it gives you another auditory cue. And vocalizing aloud helps anchor everything in your brain (similar to the way thinking out loud sometimes helps you process your thoughts). If it's a complex beat where some note occur on an off beat you might have to count "one and uh two and uh three ...." instead of just "one - two - three ....".
Playing with a metronome or click track comes easier to some musicians than others. But with slow deliberate practice, you should be able to master it eventually. If a particular piece proves exceedingly difficult, don't be afraid to play it with a beat that is easier for you. Consider this as "creating your own interpretation" of the piece.
Good luck and have fun with your music!
Play an easier piece.
Think of playing with a metronome as a skill to be learned. You'll be frustrated if you try to use a metronome and learn something else at the same time, so start with music that's so simple that it requires almost no conscious attention to play. If you have a lesson book, try the metronome with one of the early lessons. Playing the music will be very easy, but that's the point -- you want to be able to devote your attention to staying exactly in sync with the metronome's beat. It's the same idea as slowing down (also a good idea), but I think playing a simpler song makes it even easier to devote more attention to the beat.
If you don't have a lesson book, this alone would be a good reason to get one. (I use Accelerated Piano Adventures for the Older Beginner: Lesson Book 1, but any introductory book will have simple tunes that'll work.) I know you said you don't sight read, but neither do new piano students working on their first lessons. You'll be able to read this music just fine.
Since you said that you're having trouble with the off beats, you can set the metronome to count the off beats (instead of quarter notes) to make sure you are playing them correctly. For example, if you are playing a passage with 16th notes, then have the metronome click 16th notes so that each click matches up with a note you are playing.
If your piece switches subdivisions (for example between 16th notes and 16th note triplets) then you can either practice each part separately changing the metronome to the correct subdivision or you could look into a digital programmable metronome/sequencer that will let you program the subdivision changes and you can make sure you are making the change from one subdivision to the other correctly.
And as others have said, slow the metronome down so that you can play it comfortably and in time. Playing to a metronome is very difficult at first, but the more you practice it the better you will get at it.
Another thing to practice with a metronome is to clap your hands or tap your feet to the beat of the metronome while singing or speaking the rhythm of the music. If this is difficult try just practicing speaking the subdivisions of the beat, like eighth notes then sixteenth notes then triplets, etc. really focus on keeping your clapping with the metronome first and then focus on keeping the subdivisions even. For variation try leaving out the downbeat and just saying the subdivision. For example, for eighth notes you would clap and then say "uh" for each eighth note. You can also practice keeping time with recorded music.
