This probably belongs in the Creation/Customization forum, but I'll try to help.
Typically, the mods are designed to be copied into the Mods folder in the My Games/Warlords folder. Typically, you have to put them not in the program files, but in this extra folder it makes in My Documents. I don't know why they did it that way instead of keeping it all together in the program files, but that is what they did.
I would recommend reading the first post of the mod in question to see how they suggest you install it...sometimes, they have specific instructions on where to put files.
No clue. I guess they just did it because XP let them, but there has to be a better reason. Maybe to keep the game profiles different for each player in the game?
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