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I think the readme.txt file has instructions but I’ll try and simplify it. There are two files that need to be in specific places. First the file named wp-e-commerce-offline-credit-card.php needs to be in the Offline Credit Card plugin folder, /wp-content/plugins/wp-e-commerce-offline-credit-card/wp-e-commerce-offline-credit-card.php. This should be the only file in this folder, other than the readme.txt file.
The other file, offline-credit-card.php, needs to go in the Merchant folder for the main WP-E-Commerce plugin, at wp-content/plugins/wp-e-commerce/merchants/offline-credit-card.php. Make sure it is this file in Mechants, and not wp-e-commerce-offline-credit-card.php.
Do not copy/paste, but actually move the files, and make sure there is only one copy of each file in each folder.