First of all you need to unzip it.
Next, you need to transfer the resulting .img file to your cf or harddisk. I use winhex for that.
It works best on xp as windows 7 and higher sometimes refuse to access an external usb enclosure on a low level sector based method.
In linux, you can use dd to transfer an image to a disk.
You can also locate the tool they use to image sd cards for the raspberry pi. That one should work as well.
Make sure you don't image your windows drive, or it will brick your pc.
The resulting harddisk or compact flash disk should be bootable in your megatouch. It will also boot freedos.
You can examine the config.sys and autoexec.bat to see how the directory structure is set up and you can copy your megatouch files to the provided folder.