I am unable to mp3 files on fedora 7 . So i have downloaded
vlc-0.9.8a.tar.gz but does no how to install it in my computer .

read the readme files

in general

mpg123 also free mp3 player for linux
http://www.mpg123.de/

Although this won't fix your problem I'd suggest upgrading your system.
Fedora 7 may not be that old, but it is not supported anymore.
Since Fedora 11 is scheduled for next month I'd say you better go for Fedora 10 now, as also F9 will not be supported quite soon after F11 is available.

To solve your problem you don't need to compile VLC, which anyway has quite a few dependencies which can make it a bit of a headache if you're new to compiling stuff.
So what I'd suggest here is adding the RPMFusion-repositories to your repo-list and installing the necessary packages from there.

I hav used the following commands in RHEL4 :

tar -xvzf vlc-0.9.8a.tar.gz
cd vlc-0.9.8a

Then when I use "./configure" command , the following errors are
shown :

checking for HAL... Package hal was not found in the pkg-config search path.
Perhaps you should add the directory containing `hal.pc'to the PKG_CONFIG_PATH environment variable
No package 'hal' found
no
configure: WARNING: libhal >= 0.5.0 was not found. Install libhal-dev ?
checking for DBUS... Requested 'dbus-1 >= 1.0.0' but version of dbus is 0.22
no
configure: error: Couldn't find DBus >= 1.0.0, install libdbus-dev ?

As of Fedora Core 6 the mp3 format is no
longer supported out of the box. Relax!
You still have two choices.
1. You can convert your mp3's to ogg's.
2. You can hack mp3 support into Fedora Core's.

I have been listening to mp3's on Fedora Core
from versions 6 up to 10. With no problems.

To add mp3 support into Fedora Core you can go to
http://rpm.livna.org/fedora

You need to install the following package:
xmms-mp3
Keep in mind that this is not entirely legal.
If you would like to remain legal you can get
the GStreamer mp3 plugin from Fluendo.
http://www.fluendo.com/resources/fluendo_mp3.php

For more information you can go to The Fedora WIKI
http://fedoraproject.org/wiki/Mutimedia/fluendo_mp3

Once you have completed one of these steps you can
once again play mp3's on your Fedora > 6 machine.
This is all because the mp3 format itself is now
considered a proprietary format. The original writer
of this format is now asking for royalties.

Fedora is the only distro to remove mp3 support so
far as I know.

This doesn't seem to be an issue in the UNIX world
as FreeBSD has so far NOT dropped support for the
mp3 format.