WordPress.org

1. Download the plugin and unzip it into to your wp-content/plugins folder.
2. Set up the cache directory (see below)
3. Go to your wordpress admin page, and activate the plugin.
4. Configure options in the options page from wordpress admin (Options >> InlineRSS).

Cache directory

The plugin requires a cache directory somewhere below the wordpress installation folder, with world read/write acces (mode 777). Point the plugin at it via the options page within WP admin panel, using a relative path from the wordpress folder. So, for example, my options page has a 'Cache path' setting of 'wp-content/cache'. You might consider giving this a random name for security purposes, like 'wp-content/cache-n38Q'. Up to you really.

Web server

The XSLT functions used require some form of PHP XSL extension. PHP 5's XSL extension is what I've been exclusively testing with. According to the PHP manual, PHP 5 includes the XSL extension by default. Some old and probably broken PHP 4 fallbacks are still in this module's code, but it has remained untested for over a year. I have no way to test it. I'm considering just flat-out saying 'PHP 5 required'.

There's also use of CURL, so I'd advise enabling this PHP extension too. The fallback to file_get_contents is also untested, but is so simple it should work. :)