Simply install into your Blitzkrieg directory. No need to select Run/Data nor Mods folder. It will install a couple of .pak files in the Blitzkrieg/Run/Data folder which can easily be recognized by their name. Concerning the patch, I haven't found any other method so far as to open the .pak files and replace the files manually with those from the .zip.
Uninstall through the Control Panel.
While Achtung Panzer! is installed you will not be able to play the original German campaign. This can be played after Achtung Panzer! is uninstalled or removed from the Blitzkrieg folder. No file will be overwritten during the installation, so after you uninstall or directly remove Achtung Panzer! from the Blitzkrieg folder, the previous state will be restored.
To simplify things, I have taken the liberty to create a single .pak file with the patch already in it:
Simply place the .pak file into your run/data folder and you're good to go... and it is only 25MB's.
The original download is kept available, out of respect for the author and for those maybe interested.