Download the ZIP file and extract it where you can find it. It contains two files: Layer Mask.atn and Layer Mask.png. The Action Player does not use the .PNG; you will only need the .ATN file.
To install Sue's Layer Mask action into the Action Player, put the Layer Mask.atn file into this folder::
C:\Documents and Settings\All Users\Application Data\Adobe\Photoshop Elements\7.0\Locale\en_US\Workflow Panels\actions
Vista 32 or 64 bit
C:\ProgramData\Adobe\Photoshop Elements\7.0\Locale\en_US\Workflow Panels\actions
Note: For Photoshop Elements 8, just replace 7.0 with 8.0 in the path above. In Photoshop Elements 8 for Mac, copy the .atn file to the following location: System library/Application Support/Adobe/Photoshop Elements/8.0/Locale/en_US/Workflow Panels/actions
Restart Elements. Click the Guided Edit tab and under Automated Actions choose Action Player. You should see Layer Mask as one of the options in the Action Player under "Select the action set you wish to use".
One drawback to using the Action player to install actions is you do not have any thumbnnail representation of the action, but you will probably use this handy action often enough you will not need an illustration!
Not all actions you find online will work in Photoshop Elements, but many do, so have fun trying many of the free Photoshop Actions available on the Web.