You should extract the rar file just to your RTW directory - so that you should now have a 'citadel' directory in the same directory as your RTW exe (the pack file in the rar goes into DATA/packs, so if it asks to overwrite the DATA file, do so, don't worry, it wont delete everything else in there). If the rar file gives CRC errors, or doesn't include the pack file, then the mod wont work - it will CTD before the intro movies.

If you're having problems, try adding -nm -show_error to your target line (along with -mod:citadel). These will disable movies and show any errors the game picks up respectively. If your getting a crash, I would love to know about it!

So far it works fine for me on a fresh RTW with BI install that has had the latest patch applied (making it RTW 1.5, BI 1.6). If you have other mods installed, it may cause problems.