So what are you saying.
That the readme file is not correct at all?
Cause it says the following:
Installation
============
To install this on it's own into a minecraft environment, simply copy the
contents of the fml zip file into the minecraft jar file, using your preferred
zip management tool (I recommend 7 zip on windows).
For servers: the minecraft jar file is minecraft_server.jar.
For clients: the minecraft jar file is minecraft.jar.
You will additionally need
to delete the "META-INF" folder in the minecraft.jar file.
==============