Upload the entire profile-pic directory to the /wp-content/plugins/ directory
Activate the plugin through the 'Plugins' menu in WordPress
Add your picture by editing your profile in WordPress (in WP 2.5+, get to your profile by clicking on your name in the top right corner of the admin panel)
Decide where you want your profile to be displayed
Widget: simply activate and configure the Profile Pic widget
Plunk it into a page or post: anywhere you type [printprofile], your author profile and picture will be displayed. If you only want your picture displayed, use [printprofilepic] instead. Configure what profile info you want made public using the checkboxes at the bottom of your profile editor within the WP admin panel
Author Link: most templates will link the Author Name on posts/pages to a page listing with all the author's posts. By default, Profile Pic hiyjacks this listing page and replaces it with a page which will display the author's profile. You can disable this behaviour via the plugin settings page (Settings -> Profile Pic, in the WP Admin Panel).
Static Author Page: (easy to do but best for single-user blogs) create a new page, title it "About" (or whatever you want), and put [printprofile] in the content.
Dynamic Author Page: (best for multiuser blogs) if the page generated by the "author link" method above isn't good enough for you, or looks funky, deactivate it via the Profile Pic plugin options and generate your own author template. Use the included /wp-content/plugins/profile-pic/author.php file as a model, and refer to the official WordPress Author Templates Codex Page for more information on how dynamic author pages work
Template Tag Fun: See the template tag section for full documentation of the template tags