Does it matter what folder I place it in?

No, it just needs to be in your current working directory. However, if you simply copy'n'paste the code I provided for the ppd file, it won't work - because of the line wrapping and the + symbol in the CODEBASE HREF link. You'll need to either download the file, or amend your copy'n'paste.

I am Windows XP, will this still work?

Yes - should work on XP as long as it's perl-5.8.8 that you're running.

Cheers,
Rob