The readme says "You will see the 3 folders: Aircraft (shared files and engine sounds), pylons, weapons".
The zip actually has five folders and is missing the "aircraft" folder, so I created one and put the folders Clight, Manchester_Mk1_EMD, and manchester_shared in it.
Then it's just a matter of copying the three folders (aircraft, pylons, & weapons) to your main CFS3 directory (overwriting as necessary).