The installation from floppy involves copying Blitz 2 in by hand (along with all the other components). You also need to unpack the archives containing the updated debugger, libraries and editor if you want to use them.
This page of the manual gives the full directory structure you should end up with.
But to be honest, I wouldn't even bother with the floppy versions. It would be easier to use the CD version as that already has the updated parts set up as standard, and they're even newer than the updated versions on the floppies.