I looked at the readme.txt, and you're right. It doesn't explicitly tell you where to put the files. However, you can deduce that the files go within your mission's folder, within their own sub-folder "effects". However, there is no reason that you cannot simply place the files in the mission's folder directly without the subdirectory.
Note that all scripts to be used within a mission must be placed in the mission's directory (folder), although they can be within subdirectories. So, for future reference, if you download any other third-party scripts that don't specify where to put the scripts, simply put them in your mission's directory.