You REQUIRE Durante's GeDoSaTo tool, as you do with all other texture replacement mods:
http://blog.metaclassofnil.com/?page_id=582

The directory depends on where you installed GeDoSaTo. If you installed it within its own folder in the Dark Souls 2 directory, the file path should look like this:
Steam\steamapps\common\Dark Souls II\Game\GeDoSaTo\textures\DarkSoulsII\override

If you have the "GeDoSaToTool" application file outside of its own folder in the primary "Game" directory, than it will look like this:
Steam\steamapps\common\Dark Souls II\Game\textures\DarkSoulsII\override

Same thing goes if the GeDoSaToTool file is in any other directory -- just make sure the texture folder is located in the same place as the GeDoSaToTool EXE file.

You place all your textures in "override." Create any of those folders that don't already exist.
In the case of my mod, all the files are in the DDS format.

The files normal users will want to install are in the "For Users" folder.
For the easiest installation, open the "Quick Installation" folder and copy and paste all the files into the directory mentioned above.
"Custom Installation" is for those who may not want the textures changed in a certain area.
Personally I recommend using the "Custom Installation" after looking at comparison screens, since you may prefer the original look in the case of certain areas like Earthen Peak if you're dissatisfied with the new look.