I recently installed Slackware 13.1 on Virtualbox 3.2.
I downloaded the p7zip Slackbuild and untarred it using tar xvzf.
My question is how do I proceed from here? No success with installpkg or pkgtool. I cd to the directory in which the file is located and have tried various things including ./p7zip. I've been reading Slackware Essentials,the forums,and googling but with limited success.

The install guide for Slackbuilds can be found here:

http://slackbuilds.org/howto/

You should have a look at the Slackbuild site howto which explains how to build a Slackbuild. Basically you need to download the build and then extract that somewhere. Then download the source into the created directory and as root run the Slackbuild script. The link explains all of this.

You should also look at Sbopkg which is very useful for building from Slackbuilds.

I read the howto but I'm in over my head right from the beginning. I found out that a build environment is the system of files used to recompile source files but how do I set that up and extract something to it? At the moment I have p7zip.tar.gz and p7zip(which I believe is the untarred file)but no directory tree.

The last time I played around with slackbuilds, the only thing I needed to untar was the *.tar.gz file provided by SlackBuilds.org, which provided the 'build environment' (ie folder). I would then grab the source for the programme, drop it into the folder and run the executable (ie *.SlackBuild). The programme would compile, pop out a *.tgz file, and then I would install it.

For your case, I think it would run something along the lines of:

1) download
source: p7zip_9.04_src_all.tar.bz2
slackbuild package: p7zip.tar.gz

2) untar slackbuild package and place source package in the resulting folder.

3) run p7zip.SlackBuild (on the assumption its executable---sometimes they aren't, and you have to do it yourself).

4) Install the resulting Slackware package (which kept getting deposited in my /tmp directory...)