Upload the full directory into your wp-content/plugins directory
Use your favorite FTP program to create two files in your WordPress directory (that's where the wp-config.php is) named sitemap.xml and sitemap.xml.gz and make them writable via CHMOD 666. More information about CHMOD and how to make files writable is available at the WordPress Codex and on stadtaus.com. Making your whole blog directory writable is NOT recommended anymore due to security reasons.
Activate the plugin at the plugin administration page
Open the plugin configuration page, which is located under Options -> XML-Sitemap and build the sitemap the first time. If you get a permission error, check the file permissions of the newly created files.
The plugin will automatically update your sitemap of you publish a post, so theres nothing more to do :)
Requires: 2.1 or higher Compatible up to: 2.9.2 Last Updated: 2009-9-30 Downloads: 75,091