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Upload to your plugins folder, usually wp-content/plugins/ and unzip the file, it will create a wp-content/plugins/wp-cache/ directory.

If you have Compression turned on under Miscellaneous options, turn it off.

Activate the plugin on the plugin screen.

Go to "Options" administration menu, select "WP-Cache" from the submenu, the plugin will try to autoconfigure everything. The plugin will try to autoconfigure everything, in case of failure --normally due to the lack of files' permissions-- it tell you and give the instructions to solve the problems.