Well, there are a few things you need to keep in mind. The first is that when you ask questions, you need to give as much info as possible. For example, you did well to tell us what distro you're using (Mandrake 10), but you haven't told us what type of files you downloaded. You say that they are compressed (or rather that you can decompress them), so I'll assume that they are *.tar.gz files.
Since you can open files in a text editor, the next thing you should do is open the files 'README' and 'INSTALL', which should give you some hints about what to do next. Generally speaking, the procedure for installing from source (or *.tar.gz files, also known as tarballs) is as follows:
tar -xzvf filename-version#.tar.gz
Considering that you had to download more than one file, it may be important to install them in a specific order. Also, there may be important options that you must pass to the ./configure script. Again, the 'README' and/or 'INSTALL' files should have more info about this.
A bit of advice that I would offer:
1) For Mandrake, it is often easier (though not necessarily better) to install from *.rpm files. So if you can find the software you want in this format, you might want to go that route, at least until you're more comfortable with your system. Enter a terminal and type 'man rpm' for more info.
2) If you are comfortable compiling from source (usually the best way to install, though seldom the easiest), take a look at checkinstall
. It's a great application that replaces the 'make install' step I mentioned above. It will install the software, and create a *.rpm (or Slackware *.tgz, or Debian *.deb) package for you, so it will be easier to uninstall (again with the rpm command).
 I forgot to mention that your method of creating a directory in your home directory and extracting the packages there is a great way to go. After installing (especially if you use checkinstall) you can then delete these install directories. If you don't use checkinstall, the only way to uninstall may be to go back to these directories and type 'make uninstall'. This will quickly fill up a hard drive, so once again, let me recommend going with checkinstall. [/edit]