diff --git a/INSTALL.txt b/INSTALL.txt
index b257f7a..1a21512 100644
--- a/INSTALL.txt
+++ b/INSTALL.txt
@@ -5,14 +5,26 @@ INSTALLATION INSTRUCTIONS
 -------------------------
 1.  Copy the files included in the tarball into a directory named "smtp" in
     your Drupal sites/all/modules/ directory.
+
 2.  Download the PHPMailer package (the URL is listed in REQUIREMENTS section
-    of the README.txt file) and place it in a directory named "phpmailer" in
-    your <drupal-root>/sites/all/modules/smtp directory.
+    of the README.txt file). Unarchive the file and name the resulting directory
+    phpmailer
+
+3.  You can then put the library in any of 3 places:
+    a)  sites/all/libraries (ie. sites/all/libraries/phpmailer) **recommended**
+    b)  path/to/smtp  (ie. sites/all/modules/smtp/phpmailer)
+    c)  Install the libraries module and place the library at a location where
+        library module can find it.  (normally sites/all/libraries)
+        
 3.  Apply the adequate patch inside the phpmailer directory (check Drupal docs
     on how to apply patches).
+
 4.  Login as site administrator.
+
 5.  Enable the SMTP Authentication Support module on the Administer -> Site
     building -> Modules page.
+
 6.  Fill in required settings on the Administer -> Site configuration -> SMTP
     Authentication Support page.
+
 7.  Enjoy.