Installing a Dungeon Siege mod Thread

I'm positive this has been asked by newbies all over the place--unfortunately I can't find any posted, so I'll ask the question.

I downloaded a mod for Dungeon Seige, but I don't know how to intall it. In the mod's readme file, it says to move the file to the games resource file, but I can't find the resource file on my computer. This is embarressing enough--I'm generally adept at these kinds of things, but I have to admit that I'm totally perplexed.

Anyone!!! Please help.

Thanks,
maia