Probably explained elsewhere but...

[Katsuma]

I can't seem to figure out how to make the characters I've downloaded appear in game. I added the folders to the "Char" folders, but they still do not appear. If anyone could help me with this it'd be much appreciated. I'm a newbie to this thing, so... yeah D;

[Manic]

Go to the "Data" folder, and open up select.def with notepad, scroll down to the "Add your characters here" and put the name of the character's folder there; Example:
KFM, stages/stage0.def
Ryu

The comma after KFM's name will be the stage you will fight him in in arcade mode.

[Katsuma]

Ah ok. Thank you. I read a tutorial that (I think) said that same exact thing, but less clear and it confused me. D: Well, I will have to try that then. Thank you again

[ATiC3]

You have to extract them from the zip/rar file as well. Once you have them as folders, make sure there's not another folder in the folder you extracted. If there is take that out and click yes to overwriting the other one.