How do I install the plugin to my WordPress blog? Do I need hosting software. Any recommendations.

Here is the official WordPress response.

We don't allow plugins on WordPress.com for security reasons.

http://faq.wordpress.com/2006/07/22/where-is-my-plugins-tab/
http://faq.wordpress.com/2005/10/27/can-i-upload-my-own-plugins/

Best,
Anthony
Automattic | WordPress.com

You need your own hosting, this is a plugin to the WordPress open source blogging platform (wordpress.org), not to the WordPress.com hosting service.

Are there any special config settings we need to know about when installing WP? What version of WP to install? etc.. Thanks.

I'd suggest the install guide mention this step - it just assumes we have WP installed somewhere.

There's nothing special to know about. It works with any version of WordPress 2.5 or greater (so you're always safe to grab the latest version from WordPress.org), including WPMU, and you don't need any special setup.

I've never heard of someone buying a WordPress plugin when they aren't using WordPress to begin with, which is why it's assumed.