Unzip all the files "with the above exceptions on guestbook.swf and readme.txt" somewhere on your hardrive where you can get to them.
Note: I just extracted them to a folder on my desktop called guestbook but you can extract them wherever you want.
Open the folder you just unzipped the files to and upload the following files (IN ASCII) to you website where cgi scripts are allowed.
book.cgi
kitbook.txt
Now Chmod them as follows
book.cgi (755)
kitbook.txt (777)
Note: you can also Chmod kitbook.txt to (666) but I used (777) it is up to you.