WordPress MU

I am installing 2.6.5 and the readme says

4. Make sure your install directory and the wp-contents directory are writeable by the webserver

I've downloaded the zip and the tar versions and neither have a install directory. Is this something that is no longer used and the readme hasnt been changed?

It refers to the directory you are installing it from.

So, for example if you have it in the root folder at public_html, then that's what it's talking about.

And the install will let you know too.