You might want to check how it's done in valhallas script. It should be located here:
%Your Program Files%\MTA San Andreas\mods\deathmatch\resources\realism-system\c_fpview.lua
To fix that offset problem I'd suggest you to use the neck bone position of the player as camera position by using the getPedBonePosition function.
I did it this way when writing the cocpit camera feature for valhalla and it seems to work pretty well.
You are supposed to locate your GTA:San Andreas install directory in that dialogue which is usually something like this: "C:\Program Files\Rockstar Games\Grand Theft Auto San Andreas"
If you don't have GTA:San Andreas installed MTA won't work.
Just install 1.0.3 first and then the 1.0.4 nightly on top of it.
The nightly installer excludes some files like images etc. so you don't have to download the full package each time a new nightly build comes out.
Press F8 to open up the console, type "copygtacontrols" without qoutes and hit enter.
Alternatively you can just go to Settings->Controls in the Main Menu.
Usually the server will automatically be installed with your MTA installation because it's essential for the map editor and the ingame "Host game" option.
You should find the dedicated server exe in the "MTA San Andreas\server" folder.