I've not got a clue as to what the 'five folders' bit is about!
Let's start at the beginning. Put the disk into the drive tray and double-click on it's (E) icon. Take a look at what you see there. I would expect to see the set-up file for your audio processing software (which you've said is Audacity) and also the file to install the driver for your USB device driver. (Those files may well be inside different folders). From what you've written, I assume that you've located the Audacity set-up file and run it. You now need to concentrate your attention elsewhere, to look for the USB driver file. Look at the labels on any folders, to see if that helps. (e.g. you might find folders called "XPDriver", "VistaDriver" or something similar). Go into any relevant-looking folder and double-click on a file called 'Setup' or 'Install'. (If you find several files called something that, look for an executable file - with an icon depicting a blue monitor with a box alongside it. That's the one you want).
Double-clicking on the wrong icon is unlikely to do any harm. If in doubt, simply hunt through the disk and double-click everything labelled 'Setup' (or, possibly, 'Install')
Once you've got the driver installed (and, of course, Audacity), open Audacity and check that the correct input source is selected. (On the row underneath the 'cassette buttons' you should see a drop-down menu. The source you require is likely to be 'Line in'). Then, when you play a record, you should hear the sound through your PC's speakers and you can click the 'Record' button to commence recording.
Chris
PS: If you can get that far it's possible that you might find that Audacity won't let you save in MP3 format because you've not yet installed the necessary encoder - but we'll cross that bridge when we come to it ;-)