Well, I am not up to speed on Fedora, but the basics are the same for any distro.
If the file is on a CD, you need to copy it to yor hard drive somewhere (usually your home directory). Then, on a command line, type "cd dir/you/copied/to", without the quotes, and of course, entering the correct directory name. From *there* run the "tar" command, etc.
Oh, and be sure you don't type the "$" either. They are just used as shorthand to indicate you are in a terminal shell as a normal user.
BTW, is there any reason you didn't just install aterm from rpm? It's easier than compiling from source.
is the rpm for aterm-0.4.2-5, built explicitly for Fedora Core 3.