after you unzip the downloaded file change its name from nipfilter.dat to ipfilter.dat.
move the file to %AppData%\uTorrent. (this may vary depending on your operating system but in any case it goes in the folder where µTorrent saves its settings.)
either restart µTorrent or in the Peers tab right click and select Reload IPfilter
they have software available to automate the process but for me this is just as easy and less hassle.