Heh... some of the modders make it a bit more complicated than it needs to be. I was a noob like you just a couple weeks ago, and I still have no idea how to actually make a mod (if I decide to learn I'll probably wait for KOTOR 2).
To add mods to KOTOR:
Get Winzip.
Download mod.
Unzip files and export them to the Override folder in your KOTOR root folder.
Some people only put files in .rar, and .ace, etc., I don't bother with them but it's up to you.
The game then autoreplaces the original file by the same name with the new one, until you delete the files from that folder again. Nothing you put in Override can break your game in a irreversible way. Example, to make Malak a robot you would download a zip from Svosh that has 3 .tga files in it, you would export them to that folder and restart Kotor. To get rid of him, delete them and restart KOTOR. All done.
If you want to be safe do NOT use any mod that wants to put files anywhere else.
If you want to take a little risk and do so be careful about it, or only use things like the Halowan plugin that can do it on their own. I wouldn't allow any file to overwrite anything outside of the Override folder (nor has any mod ever asked me to).
I recommend creating an additional folder in KOTOR's directory, called Mods. If you download a mod for Bastila make a Bastila folder in the Mods folder and put the files there, then copy and paste them into Override. This way if you want to get rid of the Bastila changes you know exactly what to delete from Override.
Finally, some mods aren't compatible. You might download a mod that gives you two new PC heads, but that will use a file in Override that another mod uses as well. Since their can only be one copy of the file in Override you can either:
A) Pick one.
B) Combine the contents yourself (not always easy).
C) Wait for a combo pack like the Halowan plugin to do it for you.
I recommend you start here if you want a easy combo pack:
http://www.lucasforums.com/showthread.php?s=&threadid=127038&perpage=40&pagenumber=1)
It's mostly the best stuff you'll find, and though I choose to ignore some things in it (overpowered items, etc) it does enhance the game without really wrecking the gameplay.