I had a bit of confusion here as well when I initially installed the 2.1 beta. Here's what works: find lib-story.php in the system folder of your site, open it up in your favorite text editor (I use first page 2000 from evrsoft.com) scan down to about line 454 and insert the code listed in the rating plugin's readme.txt file. Here's a snippet from my lib-story.php including some context to help you situate the code in the right spot:

$editicon = $_CONF['layout_url'] . '/images/edit.' . $_IMAGE_TYPE;
        $article->set_var( 'edit_icon', '<a href="' . $_CONF['site_admin_url']
                . '/story.php?mode=edit&amp;sid=' . $A['sid'] . '"><img src="'
                . $editicon . '" alt="' . $LANG01[4] . '" title="' . $LANG01[4]
                . '" border="0"></a>' );
        $article->set_var( 'edit_image',  '<img src="' . $editicon . '" alt="'
                . $LANG01[4] . '" title="' . $LANG01[4] . '" border="0">' );
    }
// start rating code //
    if (function_exists('RATING_display_rating'))
    {
        $article->set_var( 'rating',  RATING_display_rating($A['sid'], 'story', $A['sid'], 1, 5, CONST_FLAG_DEFAULT_RATING ) );
    }

// end rating code //
    if (empty ($A['expire'])) { // e.g. in a preview
        $archiveDateTime = time ();
    } else {
        // Need to convert text date/time to a timestamp
        $t = explode( ' ', $A['expire'] );
        $archiveDateTime = COM_convertDate2Timestamp( $t[0], $t[1] );
    }
    if( $A['featured'] == 1 )

That should do the job.