The script about does need to be modified to suit your paths.
Yes
It needs to be saved in a file ending in .sh
uploaded to a directory to be used.
No, the .sh ending is not necessary. I called the script on my installation "zbackup".
You need to copy the script to your /etc/cron.daily directory and chmod it to 755. All scripts in this directory will be automatically executed every day in the morning.
