Once you've unzipped the N-Rage Plugin to your "plugins" folder, open PJ64 like you normally would. Instead of loading a game, you need to go to "Options" and then "Settings...". You will then go to the "Input (controller) plugin:" option and in the little pulldown box, you SHOULD find the option to use N-Rage's plugin.
THAT sets you up to use the plugin.
Then, to use the .cpf file you also should have downloaded and unzipped to your "plugins" folder, you will go to "Options" "Configure Controller Plugin" and you should easily spot the "Load profile" button. Click it. Then select (you might have to browse your computer to the plugins folder, it's not hard to find) the .cpf for "mouse and keyboard" settings.
Now you should see that your mouse is configured (with your keyboard) in a way that lets you treat it like a real FPS for computers. It's not my cup of tea (his settings) but I did a variant of it for my own purposes a while back. If you can get HIS to work for you and find you don't like it so much, I might be inclined to share mine.