Cant find where to put copy and pasted text.

You need first to paste that text you got from the xml generator into a Text editor (Notepad for example) and then "save as" the file into the Chrome Folder.

Be careful not to "save as" launchy.xml.txt

So have file types selected as "All" rather than as "Text" when you "save as" the file.

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To know where to save the text file launchy.xml:

Click on Launchy Icon/Options and then Launchy.xml.

That gives you the exact location of the Chrome Folder.

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Once you have saved the file, it is much easier to make further edits to the file in situ using Notepad in Launchy.

Good luck