why can't ".blender" be the name of a folder? of course it can be and it is! you have to find it.

they forgot to bundle some needed python modules in the blender 2.44 distribution so you have to install python 2.5 (www.python.org) to get the exporter working.

there is no other way to export mdl7 but if you don't need animation then you could try to export obj. med can import that.