I guess u mean "Texture Converter 2"?
Can't exactly remember which folders its asking for. One is "Texture folder ". I've chosen the original texture folder in the runtime directory . That's where it saves the converted files. I recommend to make a subfolder "TC2" or so... :)

But u can change all the settings once you have installed. So don't worry. Think about the plugins u need - and have to buy separatly. Else it won't work.