How to install wordpress plugins?

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Dave
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I want to be able to install plugins to my blog, but am not sure how to do this.

I have found this guide, but it suggests that I need to change some permissions somewhere to allow me to do this. But I don;t know where to do this.

Automatically Installing a Plugin

This is by far the easiest method but it does require that your server is setup in such a way as to allow modifications to the plugin directory. This is beyond the scope of this guide, but it involves giving group/other write permissions to the wp-content/plugins directory. Once setup you will be able to press on the Add New plugin menu option:
http://urbangiraffe.com/articles/how-to-install-a-wordpress-plugin/

Can someone please point me in the right direction? :help:
 
I think I have found it. Because I am using the free version I cannot use any plugins. If I were to download wordpress and host it myself, I could use plugins.

Is that correct?
 
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