I am also confused about this part. What should I do? Where am I suppose to put it exactly?
Also, I'm having trouble making it work. I also get that weird error about no permissions when I close a topic. So, I set the modlog directory to chmod 777. works. Then, when I go to the CP and try and view the logs, it gives me errors.
I've read through this thread and is still confused as to how to fix the above problems.