I installed TS2 in my applications folder after learning that it will not work to install it directly on the HD.
To add your EP's and SP's, just perform the installation as it tells you and install them on "Macintosh HD" when it asks you where you want to install them. Usually it will be the only area to install them anyway.
Does that help at all? I'm no genius, but hopefully that helped you out a bit!
