Custom Race help

[Tommyruin]

So I've been following this guide here and I have become stuck where it says

At this step you should have your 2 races select on the character creation.

and there is the image of the goblin. I was wondering how I put my edited XML, Lua and DBC files in a patch and have them work in WoW, because I know tis not as easy as opening MPQ Editor and just piling them all in. To edit the files I opened the patches in MyWarcraftStudio and extracted the files to a separate folder, is that the right wasy to do it? Any help? Extra info can be provided if needed. Thanks!