chrisbrobs,
Method 1 is all that is needed to get it to run: Just extract the zip file and run the cap.
The fact that construct crashes when you try to open the cap usually means that you are trying to open a cap file made in a newer version of construct than you have installed.
The example was made with Construct 0.99.96, so you need at least that version to run the example.
If the crashes occur after opening the cap file when you click "run layout" then it is perhaps another problem. In which case what are the error messages, as they will help me figure out what the problem is.