Because it's a beta, some of the ease-of-use isn't there yet. So it's a totally manual installation right now.
PS is now a service, not a contextual menu plugin. You'll need to remove the contextual menu plugin, and place the service in ~/Library/Services.
You will want to replace the preference pane with the new one. You can just double-click the preference pane and it will auto-install. Make sure System Preferences is not running, or it will probably crash.
You'll want to delete your existing com.bergenstreetsoftware.PathSnagger.plist file. It actually reads from com.bergenstreetsoftware.PathSnaggerService.plist now, but why confuse things?
Documentation isn't there yet. I'm working on it.
This distribution is via a .zip file. I'll have it in a .dmg file for the final release.
I'm running 10.6. I haven't tested this on anything less than 10.6. I'd love to know if this works on 10.5.