Priority ONE: Where does the Docs folder go?
In a standard Geeklog setup the docs folder goes into the public_html folder.
Priority TWO: Any idea how the geeklog.rss text file got turned into a windows live mail link? More important HOW do I fix it?
Clicking on a rss file through the windows file explorer (at least in Windows 7) will automatically load Windows Mail since that is the default file association for *.rss. You could change this if you want by right clicking and selecting the "open with" option. I don't think you really have a problem here though. Create a URL link to the same rss file on your website (ie http://www.yoursite.com/backend/geeklog.rss) and then try clicking it through your internet browser and everything should work as you thought.
One of the Geeklog Core Developers.