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Where do I put my Google Analytics Code?

WP Google Analytics has a config page under the settings tab in the admin area of your site. You can paste your tracking code from Google into the textarea on this page.

Can't I just paste the Google Analytics code into my template file?

Absolutely, however in order to get a better idea of what is going on with your site, it is often nice to have your own activities ignored, track 404s, searches and even where users go when they leave your site. WP Google Analytics lets you easily do all these things.