Hi Richard,
You can install mongo wherever you like (see the mongo DB installation instructions for more details). On my dev computer, I installed manually, which involved putting the source files somewhere, and then updating my computer's PATH (which is basically just a list of locations on your computer that you've installed executable programs). You will also need a folder for mongo DB to store data. By default this is /data/db.
To install the authoring tool, you need to start mongo (by running the mongod command) then in another terminal window, cd to the folder containing the source code for the authoring tool, and run node install which will start the install script. You will then be taken through the install process, and be prompted to enter various parameters (you can leave most of these as their default values).
If you need anything I've said above explaining in more detail, let me know (I have no idea how much technical knowledge you have, so may have gone into too much/not enough detail).
If you haven't already, you'll find better installation instructions in the tool's README.