If you use Peaya Paper to manage your papers, and don't change the data location, you don't need to configure Peaya Cite to use it.
To change settings, click the 2nd button . The Settings window appears (below).
Reference database file: the database file which stores your papers. Click "..." on the right to select the database file. The data file is called "PEAYA.db". It is by default located in the "Peaya" folder under your document folder. In Windows XP, your documents folder is C:\Documents and Settings\YOURNAME\My Documents. In Windows 7, it's C:\Users\YOURNAME\Documents.
Journal style folder: the folder which stores the journal styles. In this directory, you will find a lot of csl files (e.g. science.csl). Each csl file defines the format of each journal. CSL stands for "Citation Style Language", an open standard XML language.
User: whose papers do you want to use in writing the manuscript? Peaya Cite allows you to cite papers in your friends' libraries and makes collaboration easy (You don't have to email your collaborator a separate data file).
Get more journal styles ... Click this link to get more journal styles (csl files).