After downloading the InstallKnotPlotIntel.dmg.gz or KnotPlotDiskImage.dmg.gz file, your computer may or may not unzip the file. Assuming that it does, it will probably leave a InstallKnotPlotIntel.dmg or KnotPlotDiskImage.dmg file on your desktop. Double click on the the dmg file and it should mount a KnotPlot disk onto your desktop. Look inside the KnotPlot disk and you'll find the KnotPlot application and a README file, and possibly other stuff.
Copy the KnotPlot application to a convenient location. It is recommended that you place the KnotPlot application in a folder called KnotPlot inside your Applications folder. You can now eject the KnotPlot disk and delete any dmg and dmg.gz files associated with KnotPlot.
There is a file Read Me.pdf included with the distribution that has more detailed instructions on installation. That file also has information on how you can get KnotPlot to save files to a specified project folder, instead of the default of saving to the installation folder.
Please let me know if these installation instructions don't work for you.
14 November 2011