I am new to Erlang and would like to to know how to install third party modules for use in my web application.
Where do you place this files and what sort of commands do
If you wish to install 3rd party libs, like Mochiweb, system wide it's best to set it up under the $ERL_LIBS environment variable. I write a bit about it here and give examples of installing common tools here. It is probably best not to put anything inside Erlang's own code library(/usr/lib/erlang/lib) but the path inside $ERL_LIBS behaves the same way. That is that it adds $ERL_LIBS/**/ebin to the codepath.
However you should really only do things like this while learning the system. To make stable software it's best to include with your app all the dependent code. Also see the answer here for some insight on to why you may wish for this.