Upload it via FTP to your wordpress plugins directory (/wp-content/plugins/)
Activate the Community Cloud in the Plugins section of your blog’s admin.
In the Options -> Community Cloud section change the default settings to fit your blog.
Once installed, to display the community cloud on your blog you can either
a. Create a new Page on your blog and in the Page Content area, enter the following tag where you want the community cloud to appear.
and publish.
b. Or, there is also sidebar widget, so you can just go to the Widgets tab within the Presentations menu and drag-n-drop the Community Cloud widget into your sidebar.