Have you followed the correct link ?
http://downloads.phpbb-seo.com/seo-url- ... te-50.html
To update with this package, just upload the install/ folder with it's content to your phpBB3 installation root and browse yourdomain.com/phpBB3/install/index.php?mode=update to start the update procedure.
The message you quote is the regular phpBB one when you just hit yourdomain.com/phpBB3/install/ or yourdomain.com/phpBB3/install/index.php
tools gives you the correct link.
If you uploaded all the new files, then you have to run the db update tool, as explained here : http://downloads.phpbb-seo.com/seo-url- ... es-55.html
To update with this package, just upload the install/ folder with it's content to your phpBB3 installation root, then need to upload all files within the RC7_to_3-0-0_modified_files/ folder to where phpBB3 is installed.
And browse yourdomain.com/phpBB3/install/database_update.php to end the update procedure.
Make sure you clear your forum's cache after you finalize your update procedure.