Seamonkey acts a little strangely now and then and extensions and add-on software is one of those odd behavior things you just kind of have to deal with. As the instructions indicate, you pretty much have to install Seamonkey logged in as root (yeah, yeah, you're never ever supposed to do that, but...). You probably want to install add-on and extension functions logged in as root too just to save yourself some grief (not all extension and add-on functions, but it doesn't hurt and might help); doing so makes them system-wide so you don't have to user-by-user add them (things like AddBlock+, Noscript and the like are best done system-wide, logged in as root). Some extensions can be installed as the local user, some won't work properly if you do (best to check the notes for each extension or add-on before you install). Now, bear in mind that this is for Seamonkey, not for Firefox -- different software, different ways of doing things; Seamonkey pretty much follows the Netscape model of doing things (which was install-as-root).
You can install in whatever directory tree you want to but bear in mind that you may need to make symbolic links here and there; e.g., symbolically linking the seamonkey executable to /usr/bin or /usr/local/bin.