WinAce is known to choke like that sometimes on newer RAR files. You'd likely have better luck with WinRar from www.rarlabs.com
To install the mod, what you'll need to do is extract the files into the directory you have BG2 installed in, and then double-click on that setup-Chloe file. Good luck.
When I've played around with BP a bit, I've never had any trouble caused by subbing out a line or two of kitlist.2da with the appropriate line for the morituri kit I like to play with. You could (were you feeling generous) add a bit about how to do that in the readme for people who would like to play with BP or TDD. Just a thought.